Question
Based on the data and the optimal risky portfolio above, calculate the following optimal complete portfolio, comprised of a bond and equity fund. for a
Based on the data and the optimal risky portfolio above, calculate the following optimal complete portfolio, comprised of a bond and equity fund. for a client looking to invest $100,000. There are two classes of funds that you are able to purchase for your clients portfolio, class A and class B funds. The class A funds have a front-end load fee of 4% and an annual operating expense fee of 1%. The class B funds have no front-end load fee and an annual operating expense fee of 1.5%. The client has a risk aversion score of 3.5, and a holding period of 14. These are the items that need to be calculated:
- Ending dollar amount in risk-free
- Ending dollar amount risky (Class A)
- Ending dollar amount risky (Class B)
- Ending dollar amount total (Class A)
- Ending dollar amount total (Class B)
- Expected returns from Risky Portfolio
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