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Answers: expected return of new portfolio = 10.6% standard deviation of returns on new portfolio = 20% The answers are provided but I don't know
Answers: expected return of new portfolio = 10.6% standard deviation of returns on new portfolio = 20%
The answers are provided but I don't know the steps to get these answers. please explain all steps so I can fully understand how to solve. thank you!
10. Assume you have all your wealth (a million dollars) invested in the Vanguard 500 index fund, and that you expect to earn an annual return of 12%, with a stan- dard deviation in returns of 25%. Since you have become more risk averse, you decide to shift $ 200,000 from the Vanguard 500 index fund to treasury bills. The T-bill rate is 5%. Estimate the expected return and standard devia- tion of your new portfolioStep by Step Solution
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