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What is the expected return of ABC fund

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Question - Consider that the investment fund ABC Fund exists and it is 75% invested in normal stock and 25% risky bonds. Assume you have the following historical data of annual returns:

 

Return

S.D.

Normal Stock

7.2%

20%

Risky Bonds

10.7%

35%

High Risk Stock

14%

40%

Normal Bonds

6%

10%

Required - What is the expected return of ABC fund?

Reference no: EM133115398

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