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You are trying to set up a portfolio that consists of a corporate bond fund and a common stock fund. The following information about the
You are trying to set up a portfolio that consists of a corporate bond fund and a
common stock fund. The following information about the annual return per
$ of each of these investments under different economic conditions is
available along with the probability that each of these economic conditions will
eccur.
Compute the
a Expected return for corporate Bonds.
b Standard deviation for corporate Bonds.
c Expected return for common stocks
d Standard deviation for common stocks
e Would you invest in corporate bonds or common stocks? Why?
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