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Consider the following Information about a risky portfolio that you manage and a risk - free asset: E ( r P ) = 1 1

Consider the following Information about a risky portfolio that you manage and a risk-free asset:
E(rP)=11%,P=13%,rf=2%.
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 portfollo equal to 8%. What proportion should she Invest in the risky
portfolio, P, and what proportion in the rlsk-free asset?
b. What will be the standard devlation 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 rlsk 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 retu
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.
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