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Hello i need help about this exercise especially for question a, b, c and d for the board Subject : Investment Thanks The following table
Hello i need help about this exercise especially for question a, b, c and d for the board
Subject : Investment
Thanks
The following table presents the performance of stock and bond funds under various scenarios. Scenario Severe recession Mild recession Normal growth Boom Probability Rate of return of stock fund (%) 0.1 -38 0.2 -10 0.5 12 0.2 40 Rate of return of bond fund (%) -8 15 6 -2 a. Calculate the expected returns of the stock and bond funds. (4 marks) b. Calculate the standard deviations of the stock and bond funds. (4 marks) c. Calculate the correlation coefficient of the stock and bond funds. (2 marks) d. Suppose an investor forms a portfolio with stocks and bonds. Find the investment opportunity set in differing proportions. (9 marks) Portfolio expected return Portfolio standard deviation Weights in stock fund 0.0 0.1 0.2 0.3 0.4 0.5Step by Step Solution
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