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Due Question 3 3.1 The following data is available for a risky portfolio managed by you: (5 marks) = = - Expected rate of return
Due Question 3 3.1 The following data is available for a risky portfolio managed by you: (5 marks) = = - Expected rate of return = 15% Standard deviation of portfolio = 27% T-bill rate = 8% Required Calculate the expected return and standard deviation of a client's portfolio who wishes to invest 70% in the risky portfolio and 30% in T-Bill money market. 3.2 Calculate the beta of a portfolio, given the following details: (5 marks) E(rp) = 24% If = 9% E(rm) = 20% Con 3.3 What are assumptions of the Capital Asset Pricing Model (CAPM)? (5 marks) 3/4 138% 3.4 Why are T-Bills considered to be risk free (2 marks) 3.5 What is the difference between money markets and capital markets
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