Problem:
You manage an equity fund with an expected risk premium of 10.4% and a standard deviation of 18%. The rate on Treasury bills is 5%. Your client chooses to invest $45,000 of her portfolio in your equity fund and $55,000 in a T-bill money market fund.
Required:
Question: What is the expected return and standard deviation of return on your client's portfolio?
Note: Explain all steps comprehensively.