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You manage a risky portfolio with an expected rate of return of 12% and a standard deviation of 38%. The T-bill rate is 4%. Stock
You manage a risky portfolio with an expected rate of return of 12% and a standard deviation of 38%. The T-bill rate is 4%. Stock A 31% Stock B 35% Stock C 34% 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 11%. Required: What is the proportion y? What are your clients investment proportions in your three stocks and the T-bill fund? What is the standard deviation of the rate of return on your clients portfolio
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