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What is the expected return of portfolio

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Imagine that 20% of your portfolio is invested in a bond fund and 80% of your portfolio is invested in a stock index fund. The annual expected return of the bond portfolio is 4% and the annual expected return of the stock index is 8%. The annual standard deviation of the bond portfolio is 5% and the annual standard deviation of the stock index is 30%. The correlation of the bond fund and the stock index is 0.1.

1. What is the expected return of your portfolio?

2. What is the variance of your portfolio?

Reference no: EM132370499

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