Correlation coefficient of the two assets

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An investor decides to buy two risky assets, a bond portfolio and a stock portfolio. The expected return on the bond portfolio is 5% with a standard deviation of 15%. They will invest $600,000 in the bond fund. The stock fund has an expected return of 12% and a standard deviation of 27%. They will invest $800,000 in the stock portfolio. What is the expected return and risk of the new $1,400,000 portfolio? The correlation coefficient of the two assets is .2.

Reference no: EM132392731

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