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Question 8 A fund manager is recommending a risky portfolio of assets for a client who is risk averse. This client wants minimal risk from
Question 8 A fund manager is recommending a risky portfolio of assets for a client who is risk averse. This client wants minimal risk from the combination of risky assets. The client has S1,000,000 to invest in this portfolio. How much should the fund manager invest in bonds (the remainder going into stocks) to have a minimal risk portfolio for the client while still investing in riskv assets? E (r) 20.0% 9.0% 5.90% ("rho") 0.056 Stock fund (S) Bond fund (B) Risk free (st, dev.) 40.0% 27.0% 0.00% Response Refe to Practice Problem 6-8, part 1 to calculate the weight of a minimum variance Feedback portfolio. Then multiply that value times the amount the client wants to invest overall
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