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Consider the following information about a risky portfolio that you manage and a risk - free asset: E ( rP ) = 8 % ,

Consider the following information about a risky portfolio that you manage and a risk-free asset: E(rP)=8%,\sigma P=15%,rf=2%. 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?

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