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You a manager of an equity fund with an expected risk premium of 7% and standard deviation of 20%. The rate on Treasury bills is

You a manager of an equity fund with an expected risk premium of 7% and standard deviation of 20%. The rate on Treasury bills is 5%. Your client wants to invest $40,000 of their portfolio in your equity fund and $60,000 in a T-bill money market fund.

Calculate the (a) expected return and (b) standard deviation of return on your clients portfolio. (c) Sharpe ratio for your equity fund.

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