Investor A wants to maximize his expected return by investing some proportion in Stock Z which has expected rate of return of 18% and standard deviation of 25%. He invests remaining proportion in T-bills. Return of T-bill is 6.5%. The standard deviation on overall portfolio should not be more than 21%.What is the investment proportion in Stock Z and expected return on overall portfolio?

Answer rating: 100% (QA)

To find the investment proportion in Stock Z lets denote Proportion invested in Stock Z as x Proport... View the full answer