4. Optimal risky portfolio is the market portfolio. All investors are offered the optimal risky portfolio and the risk free asset. Continue with the same numbers from problem 3. Taylor wants a portfolio which will give a return of 18%. So you have to find an optimal complete portfolio for her with a return of 18%. What should be the standard deviation of this optimal complete portfolio? (7.5 points) optimal complete portfolio will lie on capital allocation line w SLOPE = Sharpe ratio ) an of intercept E(+)-rf 0.16 0.08 17.4284 = 0.459% Sharpe optimal complete portfolio @.18 08:0.459() (~) = rf & st/16) Stnord deviation @ SML EL) 0,18 -0,000 0.459 0.18 Elr) o -0.283225 0.05 ) Pe=wer,+Wyra You are the financial advisor of Taylor. There are two stocks, 1 and 2, available for investment E(n) = 20%, E(r2) = 12%, 01 = 30%, 02 = 15%, p = 0.10, rf = 8% Risk Free Rate is 8 % 3. Find out the return and standard deviation of the optimal risky portfolio consisting of stocks 1 and 2 (7.5 Points) E(-) = w, 5, twyte = 6.5 (0.2)+(0.5)(0.17)=70.16 = E(^) or = who were , we cou (rre) cov = Pir o, o = 0.0045 (0,5)*(0.3)?. (0,5)(0.15)2.210.52(0.5)(0.0045) O = 0.030 375 0= 17.4284 ch 4. Optimal risky portfolio is the market portfolio. All investors are offered the optimal risky portfolio and the risk free asset. Continue with the same numbers from problem 3. Taylor wants a portfolio which will give a return of 18%. So you have to find an optimal complete portfolio for her with a return of 18%. What should be the standard deviation of this optimal complete portfolio? (7.5 points) optimal complete portfolio will lie on capital allocation line w SLOPE = Sharpe ratio ) an of intercept E(+)-rf 0.16 0.08 17.4284 = 0.459% Sharpe optimal complete portfolio @.18 08:0.459() (~) = rf & st/16) Stnord deviation @ SML EL) 0,18 -0,000 0.459 0.18 Elr) o -0.283225 0.05 ) Pe=wer,+Wyra You are the financial advisor of Taylor. There are two stocks, 1 and 2, available for investment E(n) = 20%, E(r2) = 12%, 01 = 30%, 02 = 15%, p = 0.10, rf = 8% Risk Free Rate is 8 % 3. Find out the return and standard deviation of the optimal risky portfolio consisting of stocks 1 and 2 (7.5 Points) E(-) = w, 5, twyte = 6.5 (0.2)+(0.5)(0.17)=70.16 = E(^) or = who were , we cou (rre) cov = Pir o, o = 0.0045 (0,5)*(0.3)?. (0,5)(0.15)2.210.52(0.5)(0.0045) O = 0.030 375 0= 17.4284 ch