You manage a risky portfolio with an expected rate of return of 22% and a standard deviation of 35%. The T-bill rate is 6%. Your risky portfolio includes the following investments in the given proportions: Stock A 33% Stock B 36% Stock C 31% 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 18%. a. What is the proportion y? (Round your answer to the nearest whole number.) b. What are your client’s investment proportions in your three stocks and the T-bill fund? (Do not round intermediate calculations. Round your answers to 2 decimal place.) c. What is the standard deviation of the rate of return on your client’s portfolio? (Do not round intermediate calculations. Round your answer to 2 decimal place.)
You manage a risky portfolio with an expected
Your risky portfolio includes the following investments in the given proportions:
Stock A 33%
Stock B 36%
Stock C 31%
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 18%.
a. What is the proportion y? (Round your answer to the nearest whole number.)
b. What are your client’s investment proportions in your three stocks and the T-bill fund? (Do not round intermediate calculations. Round your answers to 2 decimal place.)
c. What is the standard deviation of the rate of return on your client’s portfolio? (Do not round intermediate calculations. Round your answer to 2 decimal place.)
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