Find the standard deviation

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Question - Consider 123 Fund (which is invested in 35% High risk stock and 65% normal bonds).

Assume you have the following historical data of annual returns:

 

Return

S.D.

Normal Stock

8%

20%

Risky Bonds

10%

35%

High Risk Stock

14%

40%

Normal Bonds

6%

10%

Assume High Risk Stocks and Normal Bonds have correlation coefficient of 0.16.

Find the standard deviation of 123.

Reference no: EM133126482

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