In: Finance
Hello Tutor!
Just these two, please!
1) Assume that you manage a risky portfolio with an expected rate of return of 15% and a standard deviation of 25%. The T-bill rate is 3% . Suppose your risky portfolio includes the following investments in the given proportions. Dell 50% Apple 30% HP 20% What are the investment proportions of your client’s overall portfolio, including the position in T-bills, if your client's risk aversion coefficient is 3? Dell Apple HP T-Bill A. 32% B. 19.2% C. 12.8% D. 36%
2)
As a financial adviser, you are recommending a well-diversified fund with an expected rate of return of 17% and a standard deviation of 39% to your clients. A client would like to split her investment between your fund and T-bills so that her standard deviation is no more than 27%. What will be her expected return? T-bill's yield 3%.
Provide your answer in percent rounded to two digits, omitting the % sign.