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Can you solve this questions for me please. 1. There is way too much drama in your family and you decide that you will focus
Can you solve this questions for me please.
1. There is way too much drama in your family and you decide that you will focus on wealth management for rich clients instead. You are managing another risky portfolio, which has the following stock holdings: The risk-free rate is 5.0%. a) Calculate the expected return for this portfolio. b) Your first client has devoted her total investment budget to pay for college for her children. After many discussions with you to figure out her risk tolerance, number of kids and the kind of colleges under consideration, she decides that an expected return in her overall portfolio of 6.5% should be sufficient to cover the likely college costs. She would like to achieve this by putting some of her money into your risky fund and the remainder in T-bills. What proportion should she invest in the risky portfolio and what proportion in the risk-free asset? c) What are the investment proportions of each security within your client's overall portfolio, including the position in T-bills? d) Suppose the standard deviation of the risky portfolio is 8%. (Note that we do not have enough information to calculate this in our problem since we describe the expected returns of the portfolio's stock holdings but not the standard deviations of the stocks themselves). What will be the standard deviation of the rate of return on her portfolioStep by Step Solution
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