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You can invest your money either in risk-free government bonds that yield 3% per year, or you can buy a well-diversified index fund that has

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You can invest your money either in risk-free government bonds that yield 3% per year, or you can buy a well-diversified index fund that has an expected return of 10% and a standard deviation of 25%. Since the index fund resembles the market portfolio, assume that the beta of this fund is I Suppose you want to create a portfolio with an expected return of 8% (by investing in government bonds and the index fund). What would be the standard deviation and the beta of such a portfolio? If you have $10,000 to invest and you want to create a portfolio consisting of government bonds and index funds that has half the systematic risk of the market portfolio, what would be the expected return and standard deviation of your portfolio

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