You Currently Have a Portfolio Comprised of 70% Stocks and 30

You currently have a portfolio comprised of 70% stocks and 30% bonds. Which one of the following must be true if you change the asset allocation?

A) The expected return will remain constant.
B) The revised portfolio will be perfectly negatively correlated with the initial portfolio.
C) The two portfolios could have significantly different standard deviations.
D) The portfolio variance will be unaffected.
E) The portfolio variance will most likely decrease in value.

Correct Answer:

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