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5. (24 points) Assume the following information regarding Tina's Applied Social Science complete portfolio which consists of a risky and risk-free portfolio: - Expected return
5. (24 points) Assume the following information regarding Tina's Applied Social Science complete portfolio which consists of a risky and risk-free portfolio: - Expected return on the risky portfolio =22% - Standard deviation of returns for the risky portfolio =33% - Risk-free rate =8% - Proportion of complete portfolio that is the risky portfolio =0.65 (a) Please calculate the expected return for the complete portfolio. (b) Please calculate the standard deviation of returns for the complete portfolio. (c) Please calculate the Sharpe ratio for the complete portfolio. (d) Now, assume that a new client wants you to create a complete portfolio for them out of the risky and risk-free portfolios described above. They have a required risk premium to variance equal to 3 . What proportion of the complete portfolio should consist of the risky portfolio
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