You manage a risky portfolio with an expected rate of return of 19% and a standa

Question

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 client chooses to invest 50% of a portfolio in your fund and 50% in a T-bill money market fund. Suppose that your risky portfollo Includes the following Investments In the given proportions: Stock A Stock B Stock C 33 % 32 % 35 % What are the Investment proportions of your client's overall portfolilo, Including the position In T-billis? (Round your answers to 1 declmal plece.) Investment Proportions T-Bills Stock A Stock B Stock C

Explanation / Answer

Total Investment 100% Investment in Risky portfolio 50% Investment in Risk free assets 50% Investments in : Stock A 50% x 33% = 16.5% Stock B 50% x 32% = 16.0% Stock C 50% x 35% = 17.5% Thus, Investment proportions T-Bills 50.0% Stock A 16.5% Stock B 16.0% Stock C 17.5%

Related Questions

Navigate

• Browse (All)
• Browse Y
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.