Question
You are building a portfolio for yourself. You will invest in three mutual funds (A, B, and C) and the risk-free asset. You want to
You are building a portfolio for yourself. You will invest in three mutual funds (A, B, and C) and the risk-free asset. You want to have an expected return for the total portfolio of 9.1%. You are investing a total of $120,336. You will invest the following amounts into the three funds: $27,900, $17,189, $29,287, the remainder you will invest in the risk-free asset. From your research you expect fund B to return 6.4% and fund C to return 13.2%. The risk-free's return currently is 3.2%. Given this information, what must be the expected return of fund A in order for the portfolio to meet your target? Answer as a percentage to two decimals
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