Find proportion of the given investor wealth

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Question: Every investor in the capital asset pricing model owns a combination of the market portfolio and a riskless asset. Assume that the standard deviation of the market portfolio is 30%, and that the expected return on the portfolio is 15%. What proportion of the following investor's wealth would you suggest investing in the market portfolio and what proportion in the riskless asset? (The riskless asset has an expected return of 5%)

a. an investor who desires a portfolio with no standard deviation

b. an investor who desires a portfolio with a standard deviation of 15%

c. an investor who desires a portfolio with a standard deviation of 30%

d. an investor who desires a portfolio with a standard deviation of 45%

e. an investor who desires a portfolio with an expected return of 12%

Reference no: EM131683234

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