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You want to form a portfolio that has an expected annual return of 18% by investing in a stock fund and a bond fund. The

You want to form a portfolio that has an expected annual return of 18% by investing in a stock fund and a bond fund. The stock fund has an expected annual return of 15% and an annual standard deviation of 40%. The bond fund, on the other hand, has an expected annual return of 10% and a standard deviation of 15%. The correlation between the annual returns of these two funds is estimated at 0.50. What would be the conditional standard deviation around your portfolios expected return?

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