Suppose Optimal Risky Portfolio has the following characteristics:
Rp = 12% and Rf = 3%, σp = 15%
What would be the investment proportion into Risky Portfolio and Risk Free security to achieve return of 10%?
What would be the St. Dev. of such final combination portfolio? (2 possible ways to calculate):
What is the optimal investment amount into Risky portfolio if investors Risk Aversion factor is 3?