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(e) Jessica invests 50% of her money in stocks and 50% of her money in the risk-free asset. What are the expected return, standard deviation,
(e) Jessica invests 50% of her money in stocks and 50% of her money in the risk-free asset. What are the expected return, standard deviation, and Sharpe ratio of her portfolio? (10 (f) Jessica plans to invest $1 million in the stock and the risk-free asset. If her risk aversion A=5, how many dollars will she invest in the stock and how many dollars will she invest in the risk-free asset in her optimal portfolio? (10%) (e) Jessica invests 50% of her money in stocks and 50% of her money in the risk-free asset. What are the expected return, standard deviation, and Sharpe ratio of her portfolio? (10 (f) Jessica plans to invest $1 million in the stock and the risk-free asset. If her risk aversion A=5, how many dollars will she invest in the stock and how many dollars will she invest in the risk-free asset in her optimal portfolio? (10%)
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