The market portfolio has an expected return of 11 percent


The market portfolio has an expected return of 11 percent with a 25-percent volatility. The risk-free rate is 5 percent. a. Investor A with $180,000 has a target expected return of 9 percent. How should he invest his $180,000? b. What are the volatility and beta of the investor A’s portfolio? c. Investor B with $200,000 has a target volatility of 30 percent. How should she invest her $200,000? d. What is the beta of the investor B’s portfolio?

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Financial Management: The market portfolio has an expected return of 11 percent
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