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An investor with a total of $100,000 is investing in a combination of a market index fund (which has an expected return 10% and a
An investor with a total of $100,000 is investing in a combination of a market index fund (which has an expected return 10% and a standard deviation of 20%) and a risk-free asset which earns 3%. How much will the investor invest in the risk-free asset if the investor desires the highest expected return possible while facing a standard deviation of no more than 16%?
Not enough information because we are not given the correlation between the two assets
$20,000
$40,000
$16,000
$60,000
$80,000
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