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Hi I need some help with the following question the subject is portfolio analysis; You manage a portfolio that is intended to produce income for

Hi I need some help with the following question the subject is portfolio analysis;

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You manage a portfolio that is intended to produce income for its investors and maintain a beta of exactly 0.5. You achieve this goal by investing in two assets: a short term bond fund (BF) with a beta of 0.3 and a mutual fund (M F) with a beta of 0.8. At the beginning of this year the two funds were valued at $600,000 in BF and $400,000 in MF. Now, at the end of the year, BF appreciated by 8%, while MF appreciated 25%. Additionally, the two funds paid dividends totaling $37,000. The agreement with your investors requires that you first collect 2% of the portfolio value in management fees and then you pay 15% of the remaining portfolio value in dividends to the investors. The values are computed using end~ of-year holdings. a) What is the balance of the portfolio once fees and dividend obligations are met? b) How many shares ofthe two funds will you have to trade (i.e. buy or sell), given that the BF trades at $40/share and MF trades at SID/share

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