J. P. Morgan Asset Management publishes information about financial investments. Over the past years, the expected return for the S&P was with a standard deviation of and the expected return over that same period for a Core Bonds fund was with a standard deviation of (J. P. Morgan Asset Management, Guide to the Markets, 1st Quarter, ). The publication also reported that the correlation between the S&P and Core Bonds is . You are considering portfolio investments that are composed of an S&P index fund and a Core Bonds fund. a. Using the information provided, determine the covariance between the S&P and Core Bonds. Round your answer to two decimal places. If required enter negative values as negative numbers.

Respuesta :

Answer:

For this problem first we need to figure out the covariance Ā of the JP morgan

and its value is 24

Second we find expected return and standard deviation whose values are 9% and 34.98