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An investor invests $50K in a stock and $30K in a risk-free bond. Over the next year, expected return on stock A is 10%, and
An investor invests $50K in a stock and $30K in a risk-free bond. Over the next year, expected return on stock A is 10%, and the return on the risk-free bond is 2%. The SD of the stock is 20%. A. Compute the portfolio weights on the two assets. B. What is the expected return on the portfolio? C. What is the risk of the portfolio? D. What is the Sharpe ratio of the stock? E. If the investor instead wanted an expected return of 8% on her portfolio, what percentage of her portfolio should she allocate in the stock
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