You manage a risky portfolio with an expected rate of return of $10\%$ and a standard deviation of $33\%.$ The T$-$bill rate is $2\%.$

Suppose that your client prefers to invest in your fund a proportion y that maximizes the expected return on the complete portfolio

subject to the constraint that the complete portfolio's standard deviation will not exceed $10\%.$

Required:

a$.$ What is the investment proportion, $y?$

b$.$ What is the expected rate of return on the complete portfolio?

Complete this question by entering your answers in the tabs below.

What is the expected rate of return on the complete portfolio?

Note: Do not round intermediate calculations. Round your answer to $2$ decimal places.

Rate of return

$\%$