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how would I go about drawing this tangent line? 6. You have two risky assets stocks and bonds with returns and risk as shown in
how would I go about drawing this tangent line?
6. You have two risky assets stocks and bonds with returns and risk as shown in the table below. The risk free rate is 8% and the correlation between the stock and bond funds is 0.10. Tabulate and draw the investment opportunity set of two funds. You may use excel to speed of your calculations. Draw a tangent line from the risk free rate to the opportunity set. Expected Return Risk (Std Deviation) Stock Fund 20% 30% Bond Fund 15% 12% Exp Rtn Stock Alloc Bond Alloc Std Dev Sharpe Ratio 0.27 100% 15% 12% 13.94% 0.40 20% 80% 13.6% 40% 60% 15.2% 15.7% 0.46 0.45 60% 40% 16.8% 19.53% 100% 0.40 0% 20% 30%Step by Step Solution
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