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1. Given the optimal weights ( 59% in stock fund and 41% in bond fund), calculate the expected rate of return and the standard deviation
1. Given the optimal weights ( 59% in stock fund and 41% in bond fund), calculate the expected rate of return and the standard deviation for the optimal risky portfolio. 2. Explain to your client why this portfolio is called the optimal risky portfolio. In other words, from the returns' perspective, explain to your client why he should invest in this portfolio, not any other portfolio. 3) marked on the capital allocation line. 4. Show the portfolio weight and the dollar amount that your client should invest in each asset (risk-free asset, bond fund, and stock fund.)
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