5 Suppose that you have $1 million and the following two opportunities from which to construct a portfolio: 10/10 points awarded a. Risk-free asset earning 8% per year. b. Risky asset with expected return of 32% per year and standard deviation of 39%. Scored If you construct a portfolio with a standard deviation of 33%, what is its expected rate of return? (Do not round your intermediate calculations. Round your answer to 1 decimal place.) eBook Expected return on portfolio 28.5 % Print References Explanation rf + Elrp) - r(f) oc E(rc) = OP op = 33 = y xo = 39 x y => y = 0.8462 E(rp) = 8 + 0.8462(32 - 8) = 28.3%