Problem 3: (10 points)

Suppose that you have $1 million and the following two opportunities from which to construct a portfolio:

1. Risk-free asset earning 10% per year.
2. Risky asset with expected return of 34% per year and standard deviation of 40%.

If you construct a portfolio with a standard deviation of 35%, what is its expected rate of return of the complete portfolio? (Do not round your intermediate calculations. Round your answer to 1 decimal place.)