Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Can someone help me determine the correct responses to this 2 part question? Assume that you manage a risky portfolio with an expected rate of

image text in transcribedCan someone help me determine the correct responses to this 2 part question?

Assume that you manage a risky portfolio with an expected rate of return of 16% and a standard deviation of 45%. The T-bill rate is 6%. Your client decides to invest in your risky portfolio a proportion (%) 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 return of 14%. a. What is the proportion y? (Enter your answer as a decimal number rounded to 2 decimal places.) Proportion y b. What is the standard deviation of the rate of return on your client's portfolio? (Enter your answer as a percentage rounded to two decimal places.) Standard deviation % per year

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Personal Finance

Authors: Jack R Kapoor, Glencoe McGraw Hill, Les R Dlabay, Robert J Hughes

1st Edition

0078698006, 9780078698002

More Books

Students also viewed these Finance questions

Question

LO2 Discuss the constraints faced in a typical recruitment process.

Answered: 1 week ago