Stocks A and B have the following historical returns: Year Stock A’s Returns, rA Stock B’s Returns, rB XXXXXXXXXX%) (24%) XXXXXXXXXX XXXXXXXXXX) XXXXXXXXXX XXXXXXXXXX If you added more stocks at...

Stocks A and B have the following historical returns:
Year Stock A’s Returns, rA Stock B’s Returns, rB
2003 (18%) (24%)
2004 44 24
2005 (22) (4)
2006 22 8
2007 34 56
If you added more stocks at random to the portfolio, which of the following
is the most accurate statement of what would happen to p?
(1) p would remain constant.
(2) p would decline to somewhere in the vicinity of 20%.
(3) p would decline to zero if enough stocks were included.