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You currently have $85,000 invested in a portfolio that has an expected return of 12% and a volatility of 9%. Suppose the risk-free rate is
You currently have $85,000 invested in a portfolio that has an expected return of 12% and a volatility of 9%. Suppose the risk-free rate is 6%, and there is another portfolio has an expected return of 19% and a volatility of 14%.
a. What portfolio has a higher expected return than your portfolio but with the same volatility?
b. What portfolio has a lower volatility than your portfolio but with the same expected return?
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