Suppose stocks and bonds have a 0.5 correlation. Bonds are expected to earn 2.4 percent, and stocks
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Suppose stocks and bonds have a 0.5 correlation. Bonds are expected to earn 2.4 percent, and stocks are expected to earn 8.7 percent. The risk (standard deviation) of bonds and stocks are 5.6 and 21.4 percent, respectively. What is the expected return an 85/15 stock/bond portfolio in percent?
Related Book For
Understanding Basic Statistics
ISBN: 978-1111827021
6th edition
Authors: Charles Henry Brase, Corrinne Pellillo Brase
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