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Business, 17.12.2019 03:31 javier1026

Consider historical data showing that the average annual rate of return on the s& p 500 portfolio over the past 85 years has averaged roughly 8% more than the treasury bill return and that the s& p 500 standard deviation has been about 29% per year. assume these values are representative of investors' expectations for future performance and that the current t-bill rate is 4%.

calculate the expected return and variance of portfolios invested in t-bills and the s& p 500 index with weights as follows: (leave no cells blank - be certain to enter "0" wherever required. do not enter your answer as a percentage but in a decimal format. round "expected return" to 4 decimal places and the "variance" to 4 decimal places.)

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