Assume that you manage a risky portfolio with an expected rate of return of 15% and...

90.2K

Verified Solution

Question

Finance

Assume that you manage a risky portfolio with an expected rateof return of 15% and a standard deviation of 25%. The T-bill rateis 3% . Suppose your risky portfolio includes the followinginvestments in the given proportions.
Dell
50%
Apple
30%
HP
20%
What are the investment proportions of your client’s overallportfolio, including the position in T-bills, if your client's riskaversion coefficient is 3?
Dell
Apple
HP
T-Bill
A.
32%
B.
19.2%
C.
12.8%
D.
36%

Answer & Explanation Solved by verified expert

3.8 Ratings (550 Votes)

See Answer

Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:

Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!

Become a Member

Transcribed Image Text

Assume that you manage a risky portfolio with an expected rateof return of 15% and a standard deviation of 25%. The T-bill rateis 3% . Suppose your risky portfolio includes the followinginvestments in the given proportions.Dell50%Apple30%HP20%What are the investment proportions of your client’s overallportfolio, including the position in T-bills, if your client's riskaversion coefficient is 3?DellAppleHPT-BillA.32%B.19.2%C.12.8%D.36%