There are two risky assets. The first is a stock fund, and the second is a long-term government and corporate bond fund. The probability distribution of risky funds is as follows: stock fund bond fund Expected ret. 0.13 0.5 std. dev. 0.23 0.1 The correlation between the fund returns is 0.27. T-bill rate is 0.29. A portfolio has 40% of assets invested in the stock fund and 60% of assets invested in the bond fund. What is the standard deviation of the portfolio? Round your answer to 4 decimal places. For example, if your answer is 3.205%, then please write down 0.0321.

There are two risky assets. The first is a stock fund, and the second is a long-term government and corporate bond fund. The probability distribution of risky funds is as follows: stock fund bond fund Expected ret. 0.13 0.5 std. dev. 0.23 0.1 The correlation between the fund returns is 0.27. T-bill rate is 0.29. A portfolio has 40% of assets invested in the stock fund and 60% of assets invested in the bond fund. What is the standard deviation of the portfolio? Round your answer to 4 decimal places. For example, if your answer is 3.205%, then please write down 0.0321.

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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