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%