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You manage a risky portfolio with an expected rate of return of 13% and a standard deviation of 28%. The T-bill rate is 2%. Stock
You manage a risky portfolio with an expected rate of return of 13% and a standard deviation of 28%. The T-bill rate is 2%. Stock A 33% Stock B 35% Stock C 32% 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 8%. 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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