lSuppose that mutual fund A has an expected return of 10% and a standard deviation of 15%. Mutual...

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lSuppose that mutual fund A has an expected return of 10% and a standard deviation of 15%. Mutual fund B has an expected return of 15% and a standard deviation of 30%. The correlation coefficient between A and B is XXXXXXXXXXPlease plot the feasible set or the opportunity set, i.e., attainable portfolios, by alternating the mix between the two funds. (2) What are the expected return and standard deviation for a portfolio comprised of 30% fund A and 70% fund B? (3) Suppose that the risk-free asset has an expected return of 5%. Using only fund B and the risk-free asset, plot the feasible.

David · Accepted Answer

Question 1 
The relevant output from excel is shown below.
Question 2 
Weightage of Fund A = 0.3 
Weightage of Fund B = 0.7 
As is apparent from the computations in part 1, expected returns on the portfolio = 13.50% 
Expected standard deviation of the portfolio = 23.

lSuppose that mutual fund A has an expected return of 10% and a standard deviation of 15%. Mutual fund B has an expected return of 15% and a standard deviation of 30%. The correlation coefficient...

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