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You want to allocate your money between the risk free asset (0.019), a fixed income fund ( E(B)=0.079, Volatility(B)=0.12), and a diversified stock fund (
You want to allocate your money between the risk free asset (0.019), a fixed income fund ( E(B)=0.079, Volatility(B)=0.12), and a diversified stock fund ( E(S)=0.145, Volatility(S)=0.16). The correlation between the two risky funds is 0.29. When creating the optimal risky portfolio, how much weight in decimals should you invest in the diversified stock fund?
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