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You are considering three mutual funds, a stock fund, a long term bond fund and a money market mutual fund. Risk and return of these
You are considering three mutual funds, a stock fund, a long term bond fund and a money market mutual fund. Risk and return of these three funds are as follows:
Expected Return Standard Deviation
Stock fund (s) .2 .3
Bond fund (b) .14 .16
Money market fund (m) .07 0
Correlation between the risky funds are .1
Find weight of stock and bond fund in the optimal risky portfolio.
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