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A portfolio manager is considering adding a stock to an actively managed equity portfolio. The stock has the following characteristics:Expected return: 15%Risk-free rate: 4%Standard deviation of the stock: 25%Correlation with the portfolio: 0.7Current Sharpe ratio of the portfolio: 0.9Should the manager add the stock to the portfolio? Calculate the stock's contribution to the portfolio’s Sharpe ratio and choose the correct answer.
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