Suppose that you want to create a portfolio that consists of a corporate bond fund, X. art a common stock fund, Y. For a $1,000 investment. the expected return for Xis $74 and the expected return for Y is $105. Tne variance for X s 1.633 and the variance for Y is 11,275. The covariance of X and Y Is 4,910. Complete parts (a) through (d).
a. Compute the portfolio expected return and portfolio risk if you put $300 in the corporate bond fund and $700 in the common stock fund. The portfolio expected return is $❑.

(Type an integer or a decimal.)

The portfolio risk is $ti. (Round to two decimal places as needed.)

b. Compute the portfolio expected return and portfolio risk if you put $500 in each fund.

The portfolio expected return is $❑.

(Type an integer or a decimal.)

The portfolio risk is $❑.

(Round to two decimal places as needed.)

c. Compute the portfolio expected return and portfolio risk if you put $800 in the corporate bond fund and $200 in the common stock fund.

The portfolio expected return is $❑.

(Type an integer or a decimal.)

The portfolio risk is $❑.

(Round to two decimal places as needed.)

d. On the basis of the results of (a) through (c), vetch portfolio would you recommend? Explain.

A risk-averse Investor would invest In the one with ............ % In X because It has ........................, whereas a risk taker would invest in the one with ........ % in X because it has .............

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