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Assume that you manage a risky portfolio with an expected rate of return of 16% and a standard deviation of 26%. The T-bill rate is
Assume that you manage a risky portfolio with an expected rate of return of 16% and a standard deviation of 26%. The T-bill rate is 5.4%. Your risky portfolio includes the following investments in the given proportions Stock A Stock B Stock C 28% 37% 35% Suppose a client decides to invest in your risky portfolio a proportion (y) 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 retum of 11.76%. Required (a) What is the proportion y? (Round your answer to 1 decimal place. Proportion tby wWhat are your clen's iiestmand ons nyur the atos and he T-bl und? (Round your answers to 2 decimal places. Omit the"%"sign in your response.) SecurityInvestment Proportions T-Bills Stock A Stock B Stock C (c) What is the standard deviation of the rate of returm on your dlients portfolio? (Round your answer to 2 decimal places. Omit the "%" sign in your response.) Standard deviation
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