Licensee chad works for broker michael. licensee chad has a listing agreement with seller ray. licensee chad decided to transfer
1 answer:
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Answer:
The lowest risk combination is at : expected return = 12%
standard deviation = 17.44%
Explanation:
Three mutual funds
stock fund : 15% expected return, 23% standard deviation
Bond fund : 9% expected return , 23% standard deviation
money market : sure rate of 5.5%
correlation between stock and bond fund = 0.15
variance for stock fund = 0.5 ( solved using excel )
variance for bond fund = 1 - variance for stock = 1 - 0.5 = 0.500
attached below is the table and
