A pension fund manager is considering three mutual funds. The first is a stock fund, the second is a long-term government andcorporate bond fund, and the third is a T-bill money market fund that yields a sure rate of 5.5%. The probability distributions of the riskyfunds are:Expected Return16%7%Stock fund (5)Bond fund (B)The correlation between the fund returns is 0.0385.Expected returnStandard deviationStandard Deviation45%39%What is the expected return and standard deviation for the minimum-variance portfolio of the two risky funds? (Do not roundintermediate calculations. Round your answers to 2 decimal places.)%%

FundExpected returnStandard deviationStock Fund 16%45%Bond Fund7%39%correlation0.0385

A pension fund manager is considering 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 5.5%. The probability distributions of the risky funds are: Expected Return 16% 7% Expected return Standard deviation Stock fund (5) Bond fund (B) The correlation between the fund returns is 0.0385. What is the expected return and standard deviation for the minimum-variance portfolio of the two risky funds? (Do not round intermediate calculations. Round your answers to 2 decimal places.) Standard Deviation 45% 39% % %

A pension fund manager is considering 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 5.5%. The probability distributions of the risky funds are: Expected Return 16% 7% Expected return Standard deviation Stock fund (5) Bond fund (B) The correlation between the fund returns is 0.0385. What is the expected return and standard deviation for the minimum-variance portfolio of the two risky funds? (Do not round intermediate calculations. Round your answers to 2 decimal places.) Standard Deviation 45% 39% % %

Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)

7th Edition

ISBN:9780357033609

Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Chapter13: Investing In Mutual Funds, Etfs, And Real Estate

Section: Chapter Questions

Problem 2FPE

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