Question
Svetlana is a private banker at USB. Her client, Mr. Aldo Gambleur, has US$1 million of investable assets: he is comfortable with taking risk. Therefore
Svetlana is a private banker at USB. Her client, Mr. Aldo Gambleur, has US$1 million of investable assets: he is comfortable with taking risk. Therefore Svetlana allocated 20% of Aldo's portfolio to US T bills (earning only 5%) and 80% to the famous balanced portfolio P known as VOLMX, which consists of 60% equities and 40% bonds. The expected return of Volmax is 15% and its volatility is 20%. Based on this information we know that the expected return of Aldo's complete portfolio C is ___________% and the volatility is ___________%. Please mark the only CORRECT answer. Selected Answers: [None Given] Answers: a. 17.5% and 20% b. 17% and 20% c. 13.0% and 20% d.13.0% and 16.0%
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