Business, 09.10.2019 18:30 2019reynolds

Suppose you have some money to investlong dashfor simplicity, $1long dashand you are planning to put a fraction w into a stock market mutual fund and the rest, 1 minus w, into a bond mutual fund. suppose that $1 invested in a stock fund yields upper r subscript s after 1 year and that $1 invested in a bond fund yields upper r subscript b, suppose that upper r subscript s is random with mean 0.07 (7%) and standard deviation 0.06, and suppose that upper r subscript b is random with mean 0.04 (4%) and standard deviation 0.03. the correlation between upper r subscript s and upper r subscript b is 0.21. if you place a fraction w of your money in the stock fund and the rest, 1 minus w, in the bond fund, then the return on your investment is upper r equals wr subscript s plus (1 minus w )upper r subscript b. suppose that w = 0.42. compute the mean and standard deviation of r. the mean is nothing. (round your response to three decimal places.) the standard deviation is nothing. (round your response to three decimal places.)

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Suppose you have some money to investlong dashfor simplicity, $1long dashand you are planning to put...

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