C30 1 The fund manager has invested 10 million euros into a bond portfolio which has expected annual return of 13% and expected risk of 8.5% 3 To reduce his overall risk, porfolio manager decided to invest into equity portfolio 4 with expected annual return of 19% and risk 22% 5 The correlation coefficient between two portfolios is -0.88 7 a. How much should be invested into a equity portfolio in order to reduce overall risk level to minimum? 8 b. What would be the expected combined return from both portfolios? Portfolio Equity portfolio 10 11 exp return 12 risk 13 corr coef 14 optimal weight 15 16 weights 17 18 19 20 21 23 24 25 26 27 28