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8. Please answer all parts and I WILL upvote, thanks! Assume that you manage a risky portfolio with an expected rate of return of 17%
8. Please answer all parts and I WILL upvote, thanks!
Assume that you manage a risky portfolio with an expected rate of return of 17% and a standard deviation of 27%. The T-bill rate is 7%. Your risky portfolio includes the following investments in the given proportions: Your client decides to invest in your risky portfolio a proportion ( ) of his total investment budget with the remainder in a T-bill money market fund so that his overall portfolio will have an expected rate of return of 15%. Required: a. What is the proportion y ? (Round your answer to 1 decimal place.) b. What are your client's investment proportions in your three stocks and in Tbills? (Round your answers to 1 decimal place.) c. What is the standard deviation of the rate of return on your client's portfolio? (Round your answer to 1 decimal place.) Step by Step Solution
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