You manage a risky portfolio with an expected rate of return of 16% and a standard deviation of 27%. The T-bill rate is 7%.

Suppose that your client decides to invest in your portfolio a proportion y of the total investment budget so that the overall portfolio will have an expected rate of return of 14%. (i) What is the proportion y? (3 points) (ii) What are your clients investment proportions in your three stocks and the T-bill fund? (2 points) (iii) What is the standard deviation of the rate of return on your clients portfolio? (2 points)