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As a financial adviser, you are recommending a well-diversified fund with an expected rate of return of 25% and a standard deviation of 43% to

As a financial adviser, you are recommending a well-diversified fund with an expected rate of return of 25% and a standard deviation of 43% to your clients. A client would like to split her investment between your fund and T-bills so that her standard deviation is no more than 28%. What will be her expected return? T-bill's yield 3%.  


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To determine the clients expected return while maintaining a standard deviation of no more than 28 we can use the concept of portfolio diversification ... blur-text-image

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