Consider the following information about a risky portfolio that you manage and a risk$-$free asset:

$E(r_P)=11\%,{}_P=15\%,r_f=3\%.$

Required:

a$.$ Your client wants to invest a proportion of her total investment budget in your risky fund to provide an expected rate of return

on her overall or complete portfolio equal to $5\%.$ What proportion should she invest in the risky portfolio, $P,$ and what proportion

in the risk$-$free asset?

b$.$ What will be the standard deviation of the rate of return on her portfolio?

c$.$ Another client wants the highest return possible subject to the constraint that you limit his standard deviation to be no more

than $17\%.$ Which client is more risk averse?

Complete this question by entering your answers in the tabs below.

What will be the standard deviation of the rate of return on her portfolio?

Note: Do not round intermediate calculations. Round your answer to $2$ decimal places.