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Suppose the Investor is based in Europe and uses euro as the currency. Expected return on MSCI equity index is 7% Expected return on bonds
Suppose the Investor is based in Europe and uses euro as the currency.
Expected return on MSCI equity index is 7%
Expected return on bonds is 4%
The risk free rate is 1%
The correlation between MSCI equity index and bond is 0.3.
The expected excess return of a 60% and 40% portfolio in equity and bond is
None of the rest
4.8%
4.6%
4.9%
4.2%
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