Question: Question 16 The table below shows the expected returns and volatilities of two investment funds, a bond fund B and an equity fund E. Fund

Question 16 The table below shows the expected returns and volatilities

Question 16 The table below shows the expected returns and volatilities of two investment funds, a bond fund B and an equity fund E. Fund Expected Return Standard Deviation Bond B 6.0% 10.5% Equity E 12.0% 21.0% The correlation between the returns on the two funds is -0.25. Consider a portfolio that invests equal amounts (i.e. 50% each) in each of the two funds. What is the standard deviation of this portfolio? A. 10.50%. B. 11.03%. C. 11.74% D. 15.75%. E. 21.00%

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