Question
d) You want to invest $10,000 in a portfolio C that is formed from the T-Bill money market fund, the bond fund, and the stock
d) You want to invest $10,000 in a portfolio C that is formed from the T-Bill money market fund, the bond fund, and the stock fund. You require that your portfolio C yield an expected return of 40 percent and that it be efficient, on the best feasible CAL. What is the standard deviation of your portfolio? How much money will you invest in the T-bill fund and each of the two risky funds?
e) You want to invest $10,000 in a portfolio C that is formed from the T-Bill money market fund, the bond fund and the stock fund. You require that your portfolio C standard deviation not to exceed 20 percent and that it be efficient, on the best feasible CAL. What is the maximum return that you can achieve on your portfolio? How much money will you invest in the T-bill fund and each of the two risky funds?
f) You want to invest $10,000 in a portfolio C that is formed from the T-Bill money market fund, the bond fund and the stock fund. If you require that your portfolio maximizes your utility and that it be efficient, on the best feasible CAL. What is the rate of return of your portfolio? What is the standard deviation of your portfolio? How much money will you invest in the T-bill fund and each of the two risky funds? What will be your utility?
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