1. A portfolio of 2 mutual funds, one investing in stocks and the other in bonds: ● ● Stock fund: Bond fund: Seatwork: Compute: 1. E(R) 2. VAR(Rp) 3. SD(Rp) Expected return Allocation Var Cov 12% .50 300 90% 8% .50 200

1. A portfolio of 2 mutual funds, one investing in stocks and the other in bonds: ● ● Stock fund: Bond fund: Seatwork: Compute: 1. E(R) 2. VAR(Rp) 3. SD(Rp) Expected return Allocation Var Cov 12% .50 300 90% 8% .50 200

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Question

1. A portfolio of 2 mutual funds, one investing in
stocks and the other in bonds:
●
Stock fund:
Bond fund:
Seatwork:
Compute :
1. E(R)
2. VAR(Rp)
3. SD(Rp)
Expected return
12%
8%
Allocation Var Cov
.50 300 90%
.50
200

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