Question: EXHIBIT 1 Asset Allocation Expected Return Standard Deviation of Return A B 11.5% 8 6 18% 14 10 3. William Ernst needs to spend 5

EXHIBIT 1 Asset Allocation Expected Return Standard Deviation of Return A B 11.5% 8 6 18% 14 10 3. William Ernst needs to

EXHIBIT 1 Asset Allocation Expected Return Standard Deviation of Return A B 11.5% 8 6 18% 14 10 3. William Ernst needs to spend 5 percent from his portfolio annually. He anticipates that inflation will be 2.4 percent annually. Ernst incurs expenses of 60 basis points a year in investing his portfolio. Which asset allocations satisfy Ernst's return requirement

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