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Thank You! You are building a portfolio that invests in a bond fund and...

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Accounting

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You are building a portfolio that invests in a bond fund and a stock index fund. The annual expected return of the bond portfolio is 5% and the annual expected return of the stock index is 10%. The annual standard deviation of the bond portfolio is 5% and the annual standard deviation of the stock index is 15%. The correlation of the bond fund and the stock index is 0.2. Suppose your goal is to have the portfolio variance equal to 0.01188. What percentage of your capital is invested in the bond fund? 45% 30% 40% 35% You are building a portfolio that invests in a bond fund and a stock index fund. The annual expected return of the bond portfolio is 5% and the annual expected return of the stock index is 10%. The annual standard deviation of the bond portfolio is 5% and the annual standard deviation of the stock index is 15%. The correlation of the bond fund and the stock index is 0.2. Suppose your goal is to have the portfolio variance equal to 0.01188. what is the expectation of your portfolio return? \begin{tabular}{l} \hline 8.5% \\ \hline 7% \\ \hline 8% \\ 7.5% \\ \hline \end{tabular}

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