You manage a risky portfolio with an expected rate of return of 18% and a standard deviation of 36%. The T-bill rate is 6%. Your risky portfolio includes the following investments in the given...


You manage a risky portfolio with an expected rate of return of 18% and a standard deviation of 36%. The T-bill rate is 6%.<br>Your risky portfolio includes the following investments in the given proportions:<br>Stock A<br>27%<br>Stock B<br>35%<br>Stock C<br>38%<br>Suppose that your client decides to invest in your portfolio a proportion y of the total investment budget so that the overall portfolio<br>will have an expected rate of return of 15%.<br>a. What is the proportion y? (Round your answer to the nearest whole number.)<br>Proportion y<br>%<br>b. What are your client's investment proportions in your three stocks and the T-bill fund? (Do not round intermediate calculations.<br>Round your answers to 2 decimal places.)<br>Investment<br>Proportions<br>T-Bills<br>%<br>Stock A<br>%<br>Stock B<br>%<br>Stock C<br>%<br>c. What is the standard deviation of the rate of return on your client's portfolio? (Do not round intermediate calculations. Round your<br>answer to 2 decimal places.)<br>Standard deviation<br>%<br>

Extracted text: You manage a risky portfolio with an expected rate of return of 18% and a standard deviation of 36%. The T-bill rate is 6%. Your risky portfolio includes the following investments in the given proportions: Stock A 27% Stock B 35% Stock C 38% 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 15%. a. What is the proportion y? (Round your answer to the nearest whole number.) Proportion y % 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 places.) Investment Proportions T-Bills % Stock A % Stock B % Stock C % 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 places.) Standard deviation %

Jun 01, 2022
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