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Correlation between the two funds

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An investor can choose to invest in two diversified funds: one predominantly debt and one equity. The mean of debt is 0.061 and the variance of debt is 0.063, while the mean and variance of the equity fund are 0.026 and 0.0646. The correlation between the two funds is 0.54. What investment on the debt fund will produce the lowest possible variance among all portfolios?

Reference no: EM133058431

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