Jenny wants to invest her money to meet a liability of $12,000.00 six months from now....

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Jenny wants to invest her money to meet a liability of $12,000.00 six months from now. She can pick between portfolios A and B and a risk-free asset that returns 1% p.a. annually compounded. Information on Assets A and B can be found in the table below. Standard deviation Beta A B 1.1 1.2 17% 27% Market expected rate of return is 7% Jenny wants her investment to have an annual volatility not higher than 25% while maximizing the return. Combining portfolios A and B with the risk-free rate (but not between each other), create two alternative strategies for her to invest in. What are expected returns of these portfolios? Jenny wants to invest her money to meet a liability of $12,000.00 six months from now. She can pick between portfolios A and B and a risk-free asset that returns 1% p.a. annually compounded. Information on Assets A and B can be found in the table below. Standard deviation Beta A B 1.1 1.2 17% 27% Market expected rate of return is 7% Jenny wants her investment to have an annual volatility not higher than 25% while maximizing the return. Combining portfolios A and B with the risk-free rate (but not between each other), create two alternative strategies for her to invest in. What are expected returns of these portfolios?

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