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You want to invest in either a stock or Treasury bills (the risk-free asset). The stock has an expected return of 9% and a standard

You want to invest in either a stock or Treasury bills (the risk-free asset). The stock has an expected return of 9% and a standard deviation of returns of 38%. T-bills have a return of 4%.

Part 1

If you invest 50% in the stock and 50% in T-bills, what is your expected return for the complete portfolio?

Part 2

What is the standard deviation of returns for such a portfolio?

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