Young investor has selected two mutual funds, growth and income. The growth fund has an expected return of $4,000 and variance of 60,000 while the income fund has an expected return of $2,500 with a variance of 45,000. The covariance between the two mutual funds is 20,000. If the growth fund is 70% of the portfolio, determine the portfolio risk.
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the portfolio risk exist with the existence of covariances
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