You currently have $300,000. You want to invest it in the following three assets: 10-year US Treasury bond with coupon rate 3.8%, Blandy and Gourmange stocks attached: Your goal is to have the expected return of 6.8% with a minimum portfolio risk. How much money should you allocate to these three assets?
You currently have $300,000. You want to invest it in the following three assets: 10-year US Treasury bond with coupon rate 3.8%, Blandy and Gourmange stocks attached: Your goal is to have the expected return of 6.8% with a minimum portfolio risk. How much money should you allocate to these three assets?
Survey of Accounting (Accounting I)
8th Edition
ISBN:9781305961883
Author:Carl Warren
Publisher:Carl Warren
Chapter15: Capital Investment Analysis
Section: Chapter Questions
Problem 15.1.1MBA
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You currently have $300,000. You want to invest it in the following three assets: 10-year US Treasury bond with coupon rate 3.8%, Blandy and Gourmange stocks attached:
Your goal is to have the expected return of 6.8% with a minimum portfolio risk. How much money should you allocate to these three assets?
![Year
Average annual return
Standard deviation of annual return
Correlation between Blandy and Gourmange
Blandy
6.4%
25.2%
0.11
Gourmange
9.2%
38.6%](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fcb068b30-af5e-4ea8-8c5c-9fa4315e077a%2F1a3e1072-f853-448a-aeb7-34bd2af77396%2F657h83b_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Year
Average annual return
Standard deviation of annual return
Correlation between Blandy and Gourmange
Blandy
6.4%
25.2%
0.11
Gourmange
9.2%
38.6%
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