1.
Expected return=80%*11%+20%*1%=9.00%
Standard deviation=80%*19%=15.20%
2.
Let w be the weight in fund
w*11%+(1-w)*1%=12%
=>w=(12%-1%)/(11%-1%)=1.1
% invested in fund=1.1*100%=110%
Standard deviation=1.1*19%=20.90%
Number 7 B - What is your dollar weighted rate of return? 7 – You manage...
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