Assume you own a portfolio that is invested 50 percent in large-company stocks and 50 percent in corporate bonds. If you want to increase the potential annual return on this portfolio, you could:
A. replace the corporate bonds with intermediate-term government bonds.
B. decrease the investment in stocks and increase the investment in bonds.
C. replace the corporate bonds with Treasury bills.
D. increase the standard deviation of the portfolio.
E. reduce the expected volatility of the portfolio.
Answer: D
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