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Lerok [7]
3 years ago
11

Consider the following two assets. The first is a stock fund, the second is a long-term government and corporate bond fund. The

probability distribution of the funds is as follows: Expected ret std. dev. Stock fund 18% 25% Bond fund 11% 18% The correlation between the fund returns is 0.4. What is the investment proportion in the minimum variance portfolio of the bond fund
Business
1 answer:
yarga [219]3 years ago
6 0

Answer:

0.76

Explanation:

So, in this particular question we are given that that there are two assets which are the; [1]. stock fund and [2]. a long-term government and corporate bond fund.

From the question/problem, we have that the Expected ret and the std. dev. for the Stock fund is 18% and 25% respectively. Also, the Expected ret and std. dev. for  Bond fund 11% and 18% respectively.

Thus, the investment proportion in the minimum variance portfolio of the bond fund = 1 - [ ( 18%)² - 0.4 × 25% × 18%) ÷ ( 25%)² + (18%)² - 2 × 0.4 × 25% × 18%. = 1 - [0.0144 ÷ 0.0609 ] = 1 - 0.24 = 0.76.

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A $150,000 loan has monthly interest-only payments of $1,000. its annual interest rate is 8 percent. Option C

This is further explained below.

<h3>What is the annual interest rate?</h3>

Generally, The annual cost of borrowing money, including any associated fees, is referred to as the Annual Percentage Rate (APR). This rate is given as a percentage.

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complete question

A $150,000 loan has monthly interest-only payments of $1,000. Its annual interest rate is

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2 years ago
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1.Allocated cost

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1.

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Building =500,000*300,000/600,000=250,000

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Allocated cost

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