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What value of w makes the mean of Ras large as possible? w= 1 maximizes u. (Round your response to two decimal places.) What is
What value of w makes the mean of Ras large as possible? w= 1 maximizes u. (Round your response to two decimal places.) What is the standard deviation of R for this value of w? = for this value of w. (Round your response to two decimal places.) Suppose you have some money to investfor simplicity, $1and you are planning to put a fraction w into a stock market mutual fund and the rest, 1 - w, into a bond mutual fund. Suppose that $1 invested in a stock fund yields Rs after 1 year and that $1 invested in a bond fund yields Rb, suppose that Rs is random with mean 0.09 (9%) and standard deviation 0.08, and suppose that Ro is random with mean 0.05 (5%) and standard deviation 0.04. The correlation between Rs and Rb is 0.27. If you place a fraction w of your money in the stock fund and the rest, 1 w, in the bond fund, then the return on your investment is R=wRs + (1 - w)Rb. What is the standard deviation of R for this value of w? 0= for this value of w. (Round your response to two decimal places.)
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