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Suppose you have two risky assets: stock and bond. The stock has expected return of 0.18 and the standard deviation of 0.4. The bond has

Suppose you have two risky assets: stock and bond. The stock has expected return of 0.18 and the standard deviation of 0.4. The bond has expected return of 0.08 and the standard deviation of 0.1. The correlation is 0.6. You form a portfolio by investing 70% of your wealth into stock and 30% of your wealth into bond. Suppose the risk-free rate is 0.04 what is your portfolio risk premium?

0.11

0.07

0.04

0.15

0.13

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