Assume that the expected rate of return on the market portfolio is 20% and the rate of return on T-bills (the risk-free rate) is 6%. The standard deviation of the market return is 25%. Assume that the market portfolio is efficient.

(Key-in your answers in decimal format and keep 4 decimal places to your answers.)

What is the slope of the capital market line :

If an efficient asset has expected return of 27%, what is the standard deviation of this asset If you have $5,000 to invest, how much should you allocate it to market portfolio and the risk-free respectively in order to achieve the above return

Standard deviation:

Allocation to market ($):

Allocation to risk-free asset ($):

If you invest $16,000 in the risk-free asset and $24,000 in the market portfolio, how much money should you expect to have at the end of the year

Expected value ($):