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Your uncle holds a portfolio consisting of a 25% allocation to a frisk-free) money market account that earns 3% per year and a 75% allocation

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Your uncle holds a portfolio consisting of a 25% allocation to a frisk-free) money market account that earns 3% per year and a 75% allocation to an ETF that tracks a broad stock index. Suppose you are informed that the standard deviation of the portfolio return equals 20% per year and the portfolio's Sharpe ratio is 0.4 Your uncle would like to alter his allocations to the ETF and risk-free asset to target a standard deviation of 30% per year. 2. What is the expected return on the ETF? (2 points) 3. What weight on the ETF will deliver the target standard deviation of 30% per year? (2 points)

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