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c) What is its bond equivalent yield o) wyotu sen the roper ater 9o days at a discount yield of 7 percent e) What are
c) What is its bond equivalent yield o) wyotu sen the roper ater 9o days at a discount yield of 7 percent e) What are money market securities? Provide some examples o What is a repurchase agreement? Here are the risk and return estimates for the T-Note Portfolio (#1) and the S&P T-Note S&P 500 (#2 10% (#1) cted ReturnE(R) 6% 12% Std Std, Deviation (a) Correlation (T-Note, S&P 500)o 1. What is the expected return and standard deviation of the following portfolios? Weight in S8P 500 Portfolio Woightin T-Note 5 0 2 5 2. What is the expected return and standard deviation of the minimum risk portfolio? 3. Which, if any, of the above portfolios are dominated by the minimum risk portfolio? 4. What is the expected return and standard deviation if you buy the minimum risk portfolio on margin (MR .6). The risk free borrowing cost is 5 percent 5. What is the role played by correlation in portfolio construction? 6. If the correlation between two securities in a portfolio increases, does its expected return increase? How about its risk? 2
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