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Estimate the expected return of new portfolio

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Question: Assume you have all your wealth (a million dollars) invested in the Vanguard 500 index fund, and that you expect to earn an annual return of 12%, with a standard deviation in returns of 25%. Since you have become more risk averse, you decide to shift $ 200,000 from the Vanguard 500 index fund to treasury bills. The T.bill rate is 5%. Estimate the expected return and standard deviation of your new portfolio.

Reference no: EM131682925

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