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You are presented with a choice between two risky funds , the expected return of stock is 23% and the expected return of a bond
You are presented with a choice between two risky funds , the expected return of stock is 23% and the expected return of a bond is 8%, the standard deviation of stock is 28% and standard deviation the bond is 12%.both has risk free return 6%. the correlation coefficient between the stocks and bonds is 0.13. Calculate the expected rate of return and standard deviation of the minimun variance portfolio identified above. What is the convariance between the stock and the bond?
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