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| 03 Portfolio Returns stock has mean of 10% and stev of 20% band has mean of and stevol 12% i correlation w stock and
| 03 Portfolio Returns stock has mean of 10% and stev of 20% band has mean of and stevol 12% i correlation w stock and bond of .0.4 v Rik free rate for cash lending and borrowing is at 2% What is the mean and stev of a portfolio of that is 60 in stock and 40% in bond (3 points) b. What is the mean and stdev of a fully inwested yet unleveraged portfolio in stock and bond, that assign weights based on inverse of stdev risk [3 points)? c. How do you combine portfolio in Q3b with cash to match mean return in Q3a portfolio? What is your cash position? What is the stdev risk of this portfolio? (3 points) Page 4 | 03 Portfolio Returns stock has mean of 10% and stev of 20% band has mean of and stevol 12% i correlation w stock and bond of .0.4 v Rik free rate for cash lending and borrowing is at 2% What is the mean and stev of a portfolio of that is 60 in stock and 40% in bond (3 points) b. What is the mean and stdev of a fully inwested yet unleveraged portfolio in stock and bond, that assign weights based on inverse of stdev risk [3 points)? c. How do you combine portfolio in Q3b with cash to match mean return in Q3a portfolio? What is your cash position? What is the stdev risk of this portfolio? (3 points) Page 4
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