Investment budget with remainder in t-bill money market fund

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Reference no: EM131047564

Assume that you manage a risky portfolio with an expected rate of return of 16% and a standard deviation of 45%. The T-bill rate is 6%. Your risky portfolio includes the following investments in the given proportions: Stock A 29 % Stock B 38 % Stock C 33 % Your client decides to invest in your risky portfolio a proportion (y) of his total investment budget with the remainder in a T-bill money market fund so that his overall portfolio will have an expected rate of return of 14%. a. What is the proportion y?

Reference no: EM131047564

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