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What is the standard deviation of portfolio

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Reference no: EM133275858

You have following information: 

Risk free return (rf) = 12%  

Stock market index return (Rm) = 15% 

Standard deviation of market (σm) = 4% 

You would like to construct an efficient portfolio with 14% return. 

What proportion of your investment should be invested for government bonds and market portfolio? 

What is the standard deviation of your portfolio?

Please select correct answer from the possibilities in bold below:

1. Invest into Govt bonds:  (66.6%, 33.33%, 76.23%, 23.67%)

2. Invest into market portfolio:  (66.6%, 33.33%, 76.23%, 23.67%)

3. Standard deviation of the portfolio is: (2.67%, 2.33%, 2%, 2.55%)

Reference no: EM133275858

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