Answered step by step
Verified Expert Solution
Question
1 Approved Answer
what is alan's portfolio weight in the risky portfolio and what is the risk-free t-bill? Assume that you manage a risky fund (XYZ) with an
what is alan's portfolio weight in the risky portfolio and what is the risk-free t-bill?
Assume that you manage a risky fund (XYZ) with an expected rate of return of 24% and a standard deviation of 40%. The T-bill rate is 8%. 1. Your client Amy chooses to invest half of her wealth in your fund XYZ and half in a T-bill money market fund. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. Input percentage points only, no % sign) The expected return of Amy's portfolio is 16 %. The standard deviation of Amy's portfolio is 20 %. 2. Suppose your client Alan has an investment budget of $200,000, and he borrows an additional $125,000 at T-bill rate, investing the total $325,000 in your risky portfolio. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. Input percentage points only, no % sign) Alan's portfolio weight in the risky portfolio is 1 %. Alan's portfolio weight in the risk-free T-bill is Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started