You manage a risky portfolio with an expected rate of return of 17% and a standard deviation of 27%. The Treasury-bill rate is 7%.

One of your clients chooses to invest 70% of a portfolio in your fund and 30% in a T-bill money market fund. What is the expected value and standard deviation of the rate of return on your clients portfolio?

Draw the best feasible CAL, show the positions of (1) your risky portfolio and (2) of the clients portfolio on your funds CAL. Label the point (ordered pair) for the risky portfolio with the label P and the point for clients complete portfolio with the label C.

Rate of Return =(0.7*17%)+(0.3*7%)= 14% per year

Standard deviation = 0.7*27%= 18.9% per year

****I am asking for the Drawing****