Anyone out there who enjoys semi-complicated statistics problems, please help! Haven't taken any stat courses since my into stat class and this econometrics problem has me stumped.
Stacey Warren - Expert brainly.com
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$1 in a stock yeilds Rs, $1 in a bond yeilds Rb
Rs is random with a mean .08 and SD of .07
Rb is random with a mean .05 and SD of .04
Correlation of Rs and Rb is .25
If you place a fraction w of your money in the stock fund and the rest, 1-w, in the bond fund, then your return on you investment is
A. Suppose that w=.5 Compute the mean and SD of R.??
B Suppose that w=.75 Compute the mean and SD of R.??
C What value of w makes the mean of R as large as possible? What is the SD of R for this value of w?
D. What us the value of w that minimizes the SD of R??