Question:
|
Year
|
Blandy
|
Gourmange
|
|
Average annual return
|
6.4%%
|
9.2%
|
|
Standard deviation of annual return
|
25.2%
|
38.6%
|
|
Correlation between Blandy and Gourmange
|
0.11
|
|
You currently have $300,000. You want to invest it in the following three assets: 10-year US Treasury bond with coupon raate 3.8%, Blandy and Gourmange stocks below:
Your goal is to have the expected return of 6.8% with a minimum portfolio risk. How much money should you allocate to these three assets?