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A person wants to form a portfolio using a mutual fund and treasury bills. The mutual fund consists of stocks A (29%), B (41%), and
A person wants to form a portfolio using a mutual fund and treasury bills. The mutual fund consists of stocks A (29%), B (41%), and C (30%); weights are in parenthesis. The mutual fund has an expected return of 11% and a standard deviation of 23%. The return on treasury bills is 4%. The person wants his portfolio to have an expected return of 9%. Find the weight of stock A in the investor's portfolio that will attain his goal.
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