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Use the following portfolio information to answer this question. Assets Portfolio Allocation % Expected Rate of...

Use the following portfolio information to answer this question.

Assets Portfolio Allocation % Expected Rate of Return Expected Standard Deviation
Risk-Free Assets
T-Bills 20% 2.0% 0
Risky Assets
Bonds 50% 6.0% 10%
Stocks 30% 20.0% 34%

1. If you had $100,000 to invest in this portfolio, based on the allocation above—including cash—compute the expected HPR% (use % and two decimals).

2. Assuming the correlation between stocks and bonds is negative (−1), compute the standard deviation of the combined risky portfolio (please use two decimals rounded up/down and % i.e. 0.4056, answer 40.56)

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jeff jeffy answered 3 years ago
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