There are three mutual funds. The first is a stock fund, the second is a...
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There are three mutual funds. The first is a stock fund, the second is a long-term government and corporate bond fund, and the third is a T-bill money market fund that yields a sure rate of 5%. The probability distributions of the risky funds are: Expected Return Standard Deviation Stock funds (S) 14% 30% Bond funds (B) 10% 20% The returns of stock fund and bond fund are independent (the correlation coefficient Pas = 0) 9) You manage $1000 for your client and your client wants an expected return of 8%. What's the range of the money you invest in risk-free T-bill fund? a) $200-$300 b) $300-$400 c) $400-$500 d) $500-$600 10) If the risk-free rate and the expected return of a stock stays the same, but the standard deviation of
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