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Expected rate of return on the complete portfolio

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Reference no: EM132118708

Risky portfolio has an expected rate of return of 18% and a standard deviation of 28%. The T-bill rate is 8%. Client prefers to invest in your fund a proportion y that maximizes the expected return on the complete portfolio subject to the constraint that the complete portfolio's standard deviation will not exceed 18%. What is the investment proportion, y? and What is the expected rate of return on the complete portfolio?

Reference no: EM132118708

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