Question: Please show work Assets Expected Return Standard Deviation Stock fund 14% 26% Bond fund 7% 13% The correlation coefficient between the returns of the stock
Please show work
| Assets | Expected Return | Standard Deviation |
| Stock fund | 14% | 26% |
| Bond fund | 7% | 13% |
The correlation coefficient between the returns of the stock fund and the bond fund is 0.45. The return on the risk-free asset is 3%.
Calculate the risk and returns of a portfolio using proportions of the stock and the fund from 0 to 100% in increments of 25%. Round to the second decimal (X.XX) and tabulate your results below. (1 pt each, 10 total)
| Weight in Stock | Weight in Bond | Expected Return | Standard deviation |
| 0 | 1 |
|
|
| 0.25 | 0.75 |
|
|
| 0.5 | 0.5 |
|
|
| 0.75 | 0.25 |
|
|
| 1 | 0 |
|
|
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