Problem $6-09$

Current Allocation: $70$ percent of Asset CS$,30$ percent of Asset FI

Proposed Allocation: $60$ percent of Asset CS$,20$ percent of Asset FI$,20$ percent of Asset PR

You also consider the following historical data for the three risky asset classes $($CS$,$ FI$,$ and PR$)$ and the risk$-$free rate $($RFR$)$ over a recent investment period:

a$.$ Calculate the expected return for the Proposed Allocation. Round your answer to two decimal places.

$\%$

b$.$ Calculate the standard deviation for the Proposed Allocation. Do not round intermediate calculations. Round your answer to two decimal places.

$\%$

Current Allocation:

Proposed Allocation:

d$.$ Using your calculations from part $($c$),$ explain which of these two portfolios is the most likely to fall on the Markowitz efficient frontier.