Problem $5-13($Algo$)$

Assume that you manage a risky portfolio with an expected rate of return of $12\%$ and a standard deviation of $47\%.$ The T$-$bill rate is $4\%.$

Your risky portfolio includes the following investments in the given proportions:

Your client decides to invest in your risky portfolio a proportion $(y)$ of his total investment budget with the remainder in a T$-$bill money

market fund so that his overall portfolio will have an expected rate of return of $10\%.$

Required:

a$.$ What is the proportion $y?($Round your answer to $1$ decimal place.$)$

Answer is complete but not entirely correct.

b$.$ What are your client's investment proportions in your three stocks and in T$-$bills? $($Round your intermediate calculations and final

answers to $2$ decimal places.$)$

Answer is complete but not entirely correct.

c$.$ What is the standard deviation of the rate of return on your client's portfolio? $($Round your intermediate calculations and final answer to $1$ decimal place.$)$