You manage a risky portfolio with expected rate of return of 12% and a standard deviation of 24%. The T-bill rate is 3%.

1. 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 8.40%.
   1. What is the proportion y?
   2. What is the standard deviation of the rate of return on your clients portfolio at this new level y?