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

$E(r_P)=8\%,{}_P=18\%,r_f=3\%.$

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 $8\%.$ 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 $23\mathrm{.}00\%.$ Which client is more risk averse?

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

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 $8\%.$ What proportion should she invest in the risky portfolio, $P,$ and what

proportion in the risk$-$free asset?

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