Question

Round all answers in this problem to 3 decimal places. J.P. Morgan Asset Management publishes information about financial investments. Between 2002 and 2011 the expected return for the S&P 500 was 5.04% with a standard deviation of 19.45% and the expected return over that same period for a core bonds fund was 5.78% with a standard deviation of 2.13%. The publication also reported that the correlation between the S&P 500 and core bonds is -.32. You are considering portfolio investments that are composed of an S&P 500 index fund and a core bonds fund. Using the information provided, determine the covariance between the S&P 500 and core bonds. [ ] For each of the following portfolios, find the expected return and standard deviation (in percentages): | Portfolio | Expected Return | Standard Deviation | | :--- | :--- | :--- | | (A) 50% invested in an S&P 500 index fund and 50% in a core bonds fund | 5.41 % | % | | (B) 20% invested in an S&P 500 index fund and 80% in a core bonds fund | % | % | | (C) 80% invested in an S&P 500 index fund and 20% in a core bonds fund | % | % | Of the three portfolios above, which one would you recommend for an investor who wishes to maximize their gains while minimizing risk? C (Type A, B, or C.)

          Round all answers in this problem to 3 decimal places.
J.P. Morgan Asset Management publishes information about financial investments. Between 2002 and 2011 the expected return for the S&P 500 was 5.04% with a standard deviation of 19.45% and the expected return over that same period for a core bonds fund was 5.78% with a standard deviation of 2.13%. The publication also reported that the correlation between the S&P 500 and core bonds is -.32. You are considering portfolio investments that are composed of an S&P 500 index fund and a core bonds fund.
Using the information provided, determine the covariance between the S&P 500 and core bonds.
[ ]
For each of the following portfolios, find the expected return and standard deviation (in percentages):
| Portfolio | Expected Return | Standard Deviation |
| :--- | :--- | :--- |
| (A) 50% invested in an S&P 500 index fund and 50% in a core bonds fund | 5.41 % | % |
| (B) 20% invested in an S&P 500 index fund and 80% in a core bonds fund | % | % |
| (C) 80% invested in an S&P 500 index fund and 20% in a core bonds fund | % | % |
Of the three portfolios above, which one would you recommend for an investor who wishes to maximize their gains while minimizing risk? C (Type A, B, or C.)

Round all answers in this problem to 3 decimal places.
J.P. Morgan Asset Management publishes information about financial investments. Between 2002 and 2011 the expected return for the S P 500 was 5.04% with a standard deviation of 19.45% and the expected return over that same period for a core bonds fund was 5.78% with a standard deviation of 2.13%. The publication also reported that the correlation between the S&P 500 and core bonds is -.32. You are considering portfolio investments that are composed of an S&P 500 index fund and a core bonds fund.
Using the information provided, determine the covariance between the S P 500 and core bonds.
[ ]
For each of the following portfolios, find the expected return and standard deviation (in percentages):
| Portfolio | Expected Return | Standard Deviation |
| :— | :— | :— |
| (A) 50% invested in an S&P 500 index fund and 50% in a core bonds fund | 5.41 % | % |
| (B) 20% invested in an S&P 500 index fund and 80% in a core bonds fund | % | % |
| (C) 80% invested in an S&P 500 index fund and 20% in a core bonds fund | % | % |
Of the three portfolios above, which one would you recommend for an investor who wishes to maximize their gains while minimizing risk? C (Type A, B, or C.)

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