Assume that you manage a risky portfolio with an expected rate of return of 18% and a standard deviation of 42%. The T-bill rate is 6%. Your client chooses to invest 85% of a portfolio in your fund and 15% in a T-bill money market fund. Required: a. What are the expected return and standard deviation of your client's portfolio (Round your answers to 1 decimal place.) Expected return Standard deviation b. Suppose your risky portfolio includes the following investments in the given proportions: 26% 35 39 Stock A Stock B Stock C What are the investment proportions of your client's overall portfolio, including the position in T-bills? (Round your answers to 1 decimal place.) Security T-Bills Stock A Stock B Stock C % per year % per year Investment Proportions % % % %
Assume that you manage a risky portfolio with an expected rate of return of 18% and a standard deviation of 42%. The T-bill rate is 6%. Your client chooses to invest 85% of a portfolio in your fund and 15% in a T-bill money market fund. Required: a. What are the expected return and standard deviation of your client's portfolio (Round your answers to 1 decimal place.) Expected return Standard deviation b. Suppose your risky portfolio includes the following investments in the given proportions: 26% 35 39 Stock A Stock B Stock C What are the investment proportions of your client's overall portfolio, including the position in T-bills? (Round your answers to 1 decimal place.) Security T-Bills Stock A Stock B Stock C % per year % per year Investment Proportions % % % %
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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![Assume that you manage a risky portfolio with an expected rate of return of 18% and a standard deviation of 42%. The T-bill rate is 6%.
Your client chooses to invest 85% of a portfolio in your fund and 15% in a T-bill money market fund.
Required:
a. What are the expected return and standard deviation of your client's portfolio (Round your answers to 1 decimal place.)
Expected return
Standard deviation
b. Suppose your risky portfolio includes the following investments in the given proportions:
26%
35
39
Stock A
Stock B
Stock C
What are the investment proportions of your client's overall portfolio, including the position in T-bills? (Round your answers to 1
decimal place.)
Security
T-Bills
Stock A
Stock B
Stock C
% per year
% per year
Investment
Proportions
%
%
%
%](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F5a93f012-7e2f-4432-af04-9698ba04d8f8%2F16745fed-eb72-44ed-8970-94a5a7b5c3b8%2F44xq1ch_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Assume that you manage a risky portfolio with an expected rate of return of 18% and a standard deviation of 42%. The T-bill rate is 6%.
Your client chooses to invest 85% of a portfolio in your fund and 15% in a T-bill money market fund.
Required:
a. What are the expected return and standard deviation of your client's portfolio (Round your answers to 1 decimal place.)
Expected return
Standard deviation
b. Suppose your risky portfolio includes the following investments in the given proportions:
26%
35
39
Stock A
Stock B
Stock C
What are the investment proportions of your client's overall portfolio, including the position in T-bills? (Round your answers to 1
decimal place.)
Security
T-Bills
Stock A
Stock B
Stock C
% per year
% per year
Investment
Proportions
%
%
%
%
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