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

Suppose 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 15%.

i. What is the proportion y?

ii. What are your client's investment proportions in your three stocks and the T-bill fund? iii. What is the standard deviation of the return on your client's portfolio?

iii. What is the standard deviation of the return on your client's portfolio?