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Your client chooses to invest 70% of a portfolio in your fund and 30% in a T-bill money market fund LO 5-3 What is the expected return and standard deviation of your client’s portfolio

  1. Your client chooses to invest 70% of a portfolio in your fund and 30% in a T-bill money market fund. (LO 5-3)

    1. What is the expected return and standard deviation of your client’s portfolio?

    2. Suppose your risky portfolio includes the following investments in the given proportions:

 

Stock A

27%

Stock B

33%

Stock C

40%

 

 

What are the investment proportions of your client’s overall portfolio, including the position in T-bills?

    1. What is the reward-to-volatility ratio ( ) of your risky portfolio and your client’s

overall portfolio?

    1. Draw the CAL of your portfolio on an expected return/standard deviation diagram. What is the slope of the CAL? Show the position of your client on your fund’s CAL.

Jun 17 2020 View more View Less

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