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Expected Return 16 % Meezan Investment Fund Standard Deviation 12 % 10 % Faisal Investment Fund 14 % PSX Fund 12% 8 % Your friend
Expected Return 16 % Meezan Investment Fund Standard Deviation 12 % 10 % Faisal Investment Fund 14 % PSX Fund 12% 8 % Your friend who works at SAROH Investment Advisory has done you a favor and told you that the correlation between returns of Meezan Investment Fund and PSX Fund is 0.7. You also know that Pakistan T Bills are offering 6 % return. Which of the following portfolios would you prefer to hold in combination with Pakistan T Bills and why? Option 1 - Meezan Investment Fund Option 2 - Faisal Investment Fund Option 3 PSX Fund Option 4 A portfolio of sixty percent of Meezan Fund and forty percent of PSX Fund [50 Marks]
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