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Now, assume the correlation between stock and bond returns is 0.70 and the correlations between stock and risk-free returns and between the bond and risk-free
Now, assume the correlation between stock and bond returns is 0.70 and the correlations between stock and risk-free returns and between the bond and risk-free returns are 0 (by construction, correlations with the risk-free asset are always zero). 3. What is the standard deviation of returns for the mutual fund? Is it higher or lower than the standard deviation found in part 2? Why
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