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Use the following capitol market expectations with respect to stock and bond funds- Use Markowitz portfolio...

Use the following capitol market expectations with respect to stock and bond funds- Use Markowitz portfolio optimization model to find the Expected return E(rp)* and the Expected standard deviation (σ p)* for the Optimal Risky Portfolio of stocks and bonds.

Stocks

Bonds

T-Bill

Er

18%

7%

5%

E σ

25%

12%

0%

Correlation=0

Weight of stocks in the optimal risky portfolio= Ws*= ______________________

Weight of bonds in the optimal risky portfolio= Wb*=______________________

Expected return for optimal risky portfolio= E(rp)*=________________________

Expected standard deviation for optimal risky portfolio=( σ p)*=______________

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jeff jeffy answered 1 year ago
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