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Assume you want an expected return of 8%. You are considering using an actively managed...

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Finance

Assume you want an expected return of 8%. You are considering using an actively managed portfolio or the market portfolio as your risky asset portfolio. You must choose to use either the actively managed portfolio or the market portfolio as your risky asset portfolio. The actively managed portfolio has an expected return of 8.32% and a standard deviation of 12.52%. The market portfolio has an expected return of 9.6% and a standard deviation of 14%. The risk-free asset has a 4% return. Given these assets and a desire to have a complete portfolio that is as efficient as possible, how much should we invested in your chosen risky asset portfolio, why?

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