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Assume that you manage a risky portfolio with an expected rate of return of 14% and...

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Finance

Assume that you manage a risky portfolio with an expected rateof return of 14% and a standard deviation of 38%. The T-bill rateis 5%. Your client chooses to invest 85% of a portfolio in yourfund and 15% in a T-bill money market fund.


a. What is the expected return and standarddeviation of your client's portfolio? (Round your answersto 2 decimal places.)

What is the reward-to-volatility ratio (S) of your riskyportfolio and your client's overall portfolio? (Round your answersto 4 decimal places.)

Answer & Explanation Solved by verified expert
4.0 Ratings (696 Votes)
Expected Return on client portfolio Weight of risky portfolio Expected return of risky portfolio Weight of TBills TBill Returns 085 014 015 005 01265 1265 Standard Deviation on client    See Answer
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