A pension fund manager is considering three mutual funds. The first is a stock fund, the second is a long-term government and corporate bond fund, and the third is a T-bill money market fund that yields a rate of 6%. The probability distribution of the risky funds is as follows: Expected Return Standard Deviation Stock fund (8) Bond fund (B) 21 36 13 22 The correlation between the fund returns is 0.13. You require that your portfollo yield an expected return of 11%, and that it be efficient, on the best feasible CAL. a. What is the standard deviation of your portfolo? (Round your answer to 2 decimal places.) Answer is complete but not entirely correct. Standard 19.79 8 % deviation
A pension fund manager is considering three mutual funds. The first is a stock fund, the second is a long-term government and corporate bond fund, and the third is a T-bill money market fund that yields a rate of 6%. The probability distribution of the risky funds is as follows: Expected Return Standard Deviation Stock fund (8) Bond fund (B) 21 36 13 22 The correlation between the fund returns is 0.13. You require that your portfollo yield an expected return of 11%, and that it be efficient, on the best feasible CAL. a. What is the standard deviation of your portfolo? (Round your answer to 2 decimal places.) Answer is complete but not entirely correct. Standard 19.79 8 % deviation
Chapter8: Analysis Of Risk And Return
Section: Chapter Questions
Problem 5P
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I use the correct fomular, but I don't know why the standard deviation is incorrect.
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