Question
Question 6 5 Points You manage a RISKY portfolio with an expected rate of return of 18.00% It has a standard deviation of 28.00% The
Question 6
5 Points
You manage a RISKY portfolio with an expected rate of return of | 18.00% | |
It has a standard deviation of |
| 28.00% |
The risk free rate of return is |
| 8.00% |
Suppose your client wants to invest in your risky fund, a proportion [y] |
| |
Your client want to maximize the expected return on the Entire Portfolio (risky + risk-free) |
| |
There is also a constraint that the Entire Portfolio has a standard devaition not greater than | 18.0% |
What is the expected rate of return on the Entire Portfolio [E(rc)]? |
The model for the E(rc) = (1-y)*rf + (y)*Return on Risky Assets |
16.54%
15.43%
14.43%
13.43%
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