You manage a risky portfolio with an expected rate of return of 19% and a...
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Finance
You manage a risky portfolio with an expected rate of return of 19% and a standard deviation of 32%. The T-bill rate is 7%.
Your risky portfolio includes the following investments in the given proportions:
| Stock A | 33% |
| Stock B | 32% |
| Stock C | 35% |
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 16%.
A. What is the proportion "y"? (Round answer to the nearest whole number).
B. What are your clients 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.)
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