Question
Suppose that Bitcoin has a risk premium of 63% and a standard deviation of 82%. The rate on T-bills is 3%. Your client chooses to
Suppose that Bitcoin has a risk premium of 63% and a standard deviation of 82%. The rate on T-bills is 3%. Your client chooses to invest $40,000 of her portfolio in Bitcoin and $60,000 in T-bills.
A. What is the expected return of your client's portfolio?
B. What is the standard deviation of return on your client's portfolio?
C. What is the slope for the Capital Allocation Line (CAL) constructed with T-bills and Bitcoin?
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Personal Finance Turning Money Into Wealth
Authors: Arthur J. Keown
6th Edition
0132719169, 978-0132719162
