Problem $6-09$

partnerships $($PR$)$ as well:

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:

You have already determined that the expected return and standard deviation for the Current Allocation are: $E(R_{\text{c}\text{u}\text{r}\text{r}\text{e}\text{n}\text{t}})=7\mathrm{.}46$ percent and ${}_{\text{c}\text{u}\text{r}\text{r}\text{e}\text{n}\text{t}}=10\mathrm{.}722$ percent.

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.

$\%$

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.

Th

$]$ is the most likely to fall on the Markowitz efficient frontier.