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There are two risky assets: a stock and a bond. The stock has an expected return of 18% and a standard deviation of 0.3. The
There are two risky assets: a stock and a bond. The stock has an expected return of 18% and a standard deviation of 0.3. The bond has an expected return of 8% and a standard deviation of 0.2. The correlation between the two assets is 0.4. The risk-free rate is 4%. You invest 60% of your wealth into stocks and 40% into bonds. What is the standard deviation of your portfolio?
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