Hi all, in EXAMPLE 5 of the REAL ESTATE session (Adding Real Estate to the Strategic Asset Allocation); Solution 2 stated:
Solution to 2:
L3V5R30-113 The proposed strategic asset allocation’s expected return of 4.9% falls well short of the (1.05)(1.02)(1.0020) – 1.0 = 7.31% return objective based on the description of the problem.
Could some one help me understand how to arrive at this 7.31%, what formula to use?
Thanks