You have been hired as a portfolio manager for Mr. Franklin Clinton who can always invest money in his own car repossession business, which generates 5% return per period without risk (risk-free),...


You have been hired as a portfolio manager for Mr. Franklin Clinton who can always invest money<br>in his own car repossession business, which generates 5% return per period without risk (risk-free),<br>i.e. R,=5%.<br>An asset C is a risky asset with a 20% expected return, and the standard deviation of this return is<br>8%.<br>If Mr. Clinton invests 75% of his money in asset C and 25% in his own business. The standard<br>deviation of his investment is;<br>% (please keep one decimal place)<br>Another asset D is a risky asset with a rate of return 35%, and the standard deviation is 15%. What<br>is the price of the risk of asset D<br>(Please input an integer)<br>Again, we assume Mr. Clinton only likes to invest in one risky asset at a time. Mr. Clinton told you<br>that he always would like to give up 1.5% expected rate of return for 1 unit of less risk (standard<br>deviation), and vice verse. How many percent of his wealth should he invest in asset D?<br>%. (Please input an integer)<br>

Extracted text: You have been hired as a portfolio manager for Mr. Franklin Clinton who can always invest money in his own car repossession business, which generates 5% return per period without risk (risk-free), i.e. R,=5%. An asset C is a risky asset with a 20% expected return, and the standard deviation of this return is 8%. If Mr. Clinton invests 75% of his money in asset C and 25% in his own business. The standard deviation of his investment is; % (please keep one decimal place) Another asset D is a risky asset with a rate of return 35%, and the standard deviation is 15%. What is the price of the risk of asset D (Please input an integer) Again, we assume Mr. Clinton only likes to invest in one risky asset at a time. Mr. Clinton told you that he always would like to give up 1.5% expected rate of return for 1 unit of less risk (standard deviation), and vice verse. How many percent of his wealth should he invest in asset D? %. (Please input an integer)

Jun 07, 2022
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