Looking back at Table 11.11, what combination of the stock fund and the bond fund has the
Question:
Looking back at Table 11.11, what combination of the stock fund and the bond fund has the lowest possible standard deviation? What is the minimum possible standard deviation?
Table 11.11
Transcribed Image Text:
Risk and Return with Stocks and Bonds Portfolio Weights Stocks 1.00 .95 .90 .85 .80 .75 .70 .65 .60 .55 .50 45 .40 .35 .30 .25 .20 .15 .10 .05 .00 Bonds .00 .05 .10 .15 .20 .25 .30 .35 .40 .45 .50 .55 .60 .65 .70 .75 .80 .85 .90 .95 1.00 Expected Return 12.00% 11.70 11.40 11.10 10.80 10.50 10.20 9.90 9.60 9.30 9.00 8.70 8.40 8.10 7.80 7.50 7.20 6.90 6.60 6.30 6.00 Standard Deviation (Risk) 15.00% 14.31 13.64 12.99 12.36 11.77 11.20 10.68 10.21 9.78 9.42 9.12 8.90 8.75 8.69 8.71 8.82 9.01 9.27 9.60 10.00
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Related Book For
Fundamentals Of Investments Valuation And Management
ISBN: 9781266824012
10th Edition
Authors: Bradford Jordan, Thomas Miller, Steve Dolvin
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