For Problems 1216, assume that you manage a risky portfolio with an expected rate of return of 17% and a standard deviation of 27%. The T-bill rate is 7%. 12. Your client chooses to invest 70% of a portfolio in your fund and 30% in a T-bill money market fund. (LO 5-3)

a. What is the expected return and standard deviation of your clients portfolio?

b. Suppose your risky portfolio includes the following investments in the given proportions: Stock A 27% Stock B 33% Stock C 40% What are the investment proportions of your clients overall portfolio, including the position in T-bills?

c. What is the reward-to-volatility ratio ( S) of your risky portfolio and your clients overall portfolio?

d. Draw the CAL of your portfolio on an expected return/standard deviation diagram. What is the slope of the CAL? Show the position of your client on your funds CAL.