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You are trying to build the best possible risky portfolio for your investment clients. You have two risky assets available to you: A risky stock
You are trying to build the best possible risky
portfolio for your investment clients. You have two
risky assets available to you: A risky stock with an
expected excess return of and a standard
deviation of and a risky bond with an expected
excess return of and a standard deviation of
If these two assets have a coefficient of
correlation of what proportion of the money
you invest in risky assets should you put in the bond?
An answer of means invest no money in the bond,
an answer of means put all of your money in the
bond. Please give your answer to three decimal
places.
answer please show how to solve
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