Assume that you manage a risky portfolio with an expected rate of return of 14% and a standard deviationof 46%. The T-bill rate is 4%. Your client chooses to invest 85% of a portfolio in your fund and 15% in a T-billmoney market fund.Required:a. What are the expected return and standard deviation of your client's portfolio? (Round your answers to 1decimal place.)Expected retumStandard deviationb. Suppose your risky portfolio includes the following investments in the given proportions:30%3040Stock AStock BStock CWhat are the investment proportions of your client's overall portfolio, including the position in T-bills?(Round your answers to 1 decimal place.)SecurityT-BillsStock AStock BStock CInvestmentProportions% per year% per year%%%%Risky portfolioClient's overall portfolioc. What is the reward-to-volatility ratio (S) of your risky portfolio and your client's overall portfolio? (Roundyour answers to 4 decimal places.)Reward-to-Volatility Ratio

The investment proportions of the individual assets are given above based on 50% of the portfolio.…

Assume that you manage a risky portfolio with an expected rate of return of 14% and a standard deviation of 46%. The T-bill rate is 4%. 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: Stock A Stock B Stock C 30% 30 40 Security T-Bills 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.) % per year % per year Investment Proportions % % % %

Assume that you manage a risky portfolio with an expected rate of return of 14% and a standard deviation of 46%. The T-bill rate is 4%. 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: Stock A Stock B Stock C 30% 30 40 Security T-Bills 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.) % per year % per year Investment Proportions % % % %

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter8: Analysis Of Risk And Return

Section: Chapter Questions

Problem 6P

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