Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. a pension fund manager is considering three mutual

A pension fund manager is considering three mutual funds. The first is a stock fund, the...

50.1K

Verified Solution

Question

Finance

A pension fund manager is considering three mutual funds. Thefirst is a stock fund, the second is a long-term government andcorporate bond fund, and the third is a T-bill money market fundthat yields a rate of 5.6%. The probability distribution of therisky funds is as follows:

  

Expected ReturnStandard Deviation
   Stock fund (S)17%        46%         
   Bond fund (B)8        40         

  

The correlation between the fund returns is 0.16.

  

Solve numerically for the proportions of each asset and for theexpected return and standard deviation of the optimal riskyportfolio. (Do not round intermediate calculations andround your final answers to 2 decimal places. Omit the \"%\" sign inyour response.)

  

  Portfolio invested in the stock%
  Portfolio invested in the bond%
  Expected return%
  Standard deviation%

Answer & Explanation Solved by verified expert
3.9 Ratings (596 Votes)
PORTFOLIO INVESTED    See Answer
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Psychology
1.2K views

In a minimum of 500 words, describe what strategies you can use to map out a...

Psychology
1.2K views

what are Millennials' attitudes about immigration? Is this surprising to you? How might you explain their...

Advance Math
1.2K views

A fluid has velocity components of u=(8t2)m/s and v=(8y+3x)m/s, where x and y are in meters...

Physics
1.2K views

A mass m is suspended by means of two coiled spring which have the same...

Physics
1.2K views

12 A particle of mass m moves with constant speed v on a circular path...

Algebra
1.2K views

1 Let f x 6x 5 and g x Find f g x f g...

Accounting
1.2K views

Which of the following taxpayers need not file a tax return for 2019? ...

Accounting
1.2K views

Exercise 22-7 (Algo) Departmental contribution to overhead LO P3 Below are departmental income statements for...

Accounting
1.2K views

Warnerwoods Company uses a perpetual inventory system. It entered into the following purchases and sales...

Accounting
1.2K views

12 ?What is the expected profit for small shop using EMV decision method (3 )...

Finance
1.2K views

Currently, Ally Gator has $9,000 in her Roth IRA. If Ally plans on contributing $5000...

Finance
1.2K views

Saved Help Save &Exit Submit 3 Check my work Years from Now After-Tax Cash Flow...