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You are considering three mutual funds. The first is a stock fund, the second is a long-term government and corporate bond fund, and the third
You are considering three mutual funds. The first is a stock fund, the second is a long-term government and corporate bond fund, and the third is a T-bill money market fund that yields a rate of 3%. The stock fund has an expected return of 15% and a variance of 0.25. The bond fund has an expected return of 8% and a variance of 0.09. The correlation coefficient between the stock and bond funds is 0.16. If you invest $5,000 in the stock fund and $5,000 in the bond fund. What is the standard deviation of your portfolio?
A. | 0.097 | |
B. | 0.258 | |
C. | 0.106 | |
D. | 0.311 |
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