Question: Consider the table below showing return and risk for two investment funds. Mutual Funds Returns Standard Deviation Fund A : A well diversified stock fund

Consider the table below showing return and risk for two investment funds.

Mutual Funds Returns Standard Deviation

Fund A : A well diversified stock fund 8% 17%

Fund B: A risk-free fund consisting entirely of Treasury bills 3.5% 0%

2.A Calculate the return for a portfolio consisting of 70 % in fund A, and 30% in fund B. Show calculations

2.B Calculate the standard deviation for a portfolio consisting of 70 % in fund A, and 30% in fund B. Show calculations

Explain Calculations with respect to Excel

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