Assume that you manage a risky portfolio with an expected rate of return of 18.7
ID: 2660983 • Letter: A
Question
Assume that you manage a risky portfolio with an expected rate of return of 18.7% and a standard deviation of 28.3%. The T-bill rate is 7%
Your client chooses to invest 75% of a portfolio in your fund and 25% in a T-bill money market fund. What is the expected return and standard deviation of your client's portfolio?
Suppose your risky portfolio includes the following investments in the given proportions:
What are the investment proportions of your client
Assume that you manage a risky portfolio with an expected rate of return of 18.7% and a standard deviation of 28.3%. The T-bill rate is 7%
Your client chooses to invest 75% of a portfolio in your fund and 25% in a T-bill money market fund. What is the expected return and standard deviation of your client's portfolio?
Suppose your risky portfolio includes the following investments in the given proportions:
Stock A 21% Stock B 48% Stock C 31%
What are the investment proportions of your client
Explanation / Answer
(a)
Your client chooses to invest 75% of a portfolio in your fund and 25% in a T-bill money market fund. What is the expected return and standard deviation of your client's portfolio?
The expected return = 18.7*75% + 7*25% = 15.775%
Standard deviation = 28.3*75% = 21.225%
Suppose your risky portfolio includes the following investments in the given proportions:
What are the investment proportions of your client
(b)Suppose your risky portfolio includes the following investments in the given proportions: