You invest your money in a portfolio that consists of 70% of Fund X and 30%...

You invest your money in a portfolio that consists of 70% of Fund X and 30% of Fund B. The annual return for X is 10% and the standard deviation is 15%. The annual return for Y is 9% and the standard deviation is 19%. The correlation between X and Y is 0.60.

a. Compute the return and standard deviation of your portfolio invested?

b. Assuming you hold this portfolio for over 20 years, what is the probability of return for any particular year is less than 5%?

Expert Solution

orchestra answered 1 year ago

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