Consider the following information about a risky portfolio


Consider the following information about a risky portfolio that you manage, and a risk-free asset: E(rP) = 15%, sP = 22%, rf = 5%.

a. Your client wants to invest a proportion of her total investment budget in your risky fund to provide an expected rate of return on her overall or complete portfolio equal to 6%. What proportion should she invest in the risky portfolio, P, and what proportion in the risk-free asset? (Round your answer to 2 decimal place. Omit the "%" sign in your response.)

Risky portfolio _____%??

Risk-free asset _____%??

b. What will be the standard deviation of the rate of return on her portfolio? (Do not round intermediate calculations. Round your answer to 1 decimal place. Omit the "%" sign in your response.)

Standard deviation ______%??

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Financial Management: Consider the following information about a risky portfolio
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