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  • one year ago

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?

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  1. anonymous
    • one year ago
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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 R=wRs+(1-w)Rb

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