Answered

Find the information you're looking for at Westonci.ca, the trusted Q&A platform with a community of knowledgeable experts. Discover the answers you need from a community of experts ready to help you with their knowledge and experience in various fields. Get quick and reliable solutions to your questions from a community of experienced experts on our platform.

The Knowles/Armitage (KA) group at Merrill Lynch advises clients on how to create a diversified investment portfolio. One of the investment alternatives they make available to
clients is the All world fund composed of global stocks with good dividend yields. One of
their clients is interested in a portfolio consisting of investment in the All world fund and a
treasury bond fund. The expected percent return of an investment in the All world fund is
7.80% with a standard deviation of 18.90%. The expected percent return of an investment
in a treasury bond fund is 5.50% and the standard deviation is 4.60%. The covariance of an
investment in the All world fund with an investment in a treasury bond fund is −12.4. If KA recommends that the client invest 75% in the All world fund and 25% in the
treasury bond fund, what is the expected percent return and standard deviation for such
a portfolio? what would be the expected return and standard deviation, in dollars, for
a client investing $10,000 in such a portfolio?

Sagot :

We hope this information was helpful. Feel free to return anytime for more answers to your questions and concerns. Thanks for using our service. We're always here to provide accurate and up-to-date answers to all your queries. Stay curious and keep coming back to Westonci.ca for answers to all your burning questions.