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Portfolio Weights, Expected Returns, and Standard Deviation

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#4. After examining the opportunity set, you notice that you can invest in a portfolio consisting of the bond fund and the large-cap stock fund that will have exactly the same standard deviation as the bond fund. This
portfolio will also have a greater expected return. What are the portfolio weights and expected return of this portfolio?

#5. Examining the opportunity set, notice there is a portfolio that has the lowest standard deviation. This in the minimum variance portfolio. What are the portfolio weights, expected return, and standard deviation of this
portfolio? Why is the minimum variance portfolio important?

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Solution Summary

The solution discusses East Coast Yachts portfolio weights, expected returns and standard deviation.

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Please see the attached file(s) for the complete tutorial.

Chapter 11
A Job at East Coast Yachts, Part 2

Input area:

10-year annual return Standard deviation
Bledsoe Large Company Stock Fund 11.08% 26.73%
Bledsoe Bond Fund 8.15% 10.34%
Risk-free rate ...

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