Portfolio in the municipal bond fund

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Your risky 2-security portfolio is comprised of a stock fund and a municipal bond fund. The stock fund has an expected return of 20%, and a standard deviation of 28.5%. The expected return of the municipal bond fund is 8%, and its standard deviation is 6.75%.

Based on your risk tolerance, you decide to invest 35% of the portfolio in the municipal bond fund, and the rest in the stock fund.

What is your portfolio's expected return?

Reference no: EM132246846

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