Assume that you manage a risky portfolio with an expected rate of return of 14% and a standard deviation of 30%. The T-bill rate is 6%. Your client chooses to invest 85% of a portfolio in your fund and 15% in a T-bill money market fund.

a. What is the expected return and standard deviation of your client's portfolio? (Round your answers to 2 decimal places.)

Expected return __% per year

Standard deviation __ % per year

b. Suppose your risky portfolio includes the following investments in the given proportions:

Stock A __%

Stock B __%

Stock C __%

What are the investment proportions of your clients overall portfolio, including the position in T-bills? (Round your answers to 2 decimal places.)

Security Investment Proportions

T-Bills __ %

Stock A __%

Stock B __ %

Stock C __ %

c. What is the reward-to-volatility ratio (S) of your risky portfolio and your client's overall portfolio? (Round your answers to 4 decimal places.)

Reward-to-Volatility Ratio

Risky portfolio ____

Clients overall portfolio ____