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Assume you manage an equity fund with an expected risk premium of 10% and a standard deviation of 40%. The return on Treasury bills is

Assume you manage an equity fund with an expected risk premium of 10% and a standard

deviation of 40%. The return on Treasury bills is 4%.

  1. Suppose another client invests in your fund and in T-bills so that his portfolio has anexpected return of 8%
    1. If the client invests a total of $30,000, how much is invested in your fund?
    1. What is his portfolios standard deviation?
    2. What is the Sharpe ratio of his portfolio?

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