Suppose you have $1000 to invest, and you have only two assets to choose from. There...

Transcribed Image Text:

Suppose you have $1000 to invest, and you have only two assets to choose from. There is a risky asset that has an expected return of 12% and a standard deviation of 15% and a risk-free asset that has an expected return of 5%. a. How would you form a portfolio that has an expected return of 9%? b. How would you form a portfolio that has a standard deviation of 6%? Suppose you have $1000 to invest, and you have only two assets to choose from. There is a risky asset that has an expected return of 12% and a standard deviation of 15% and a risk-free asset that has an expected return of 5%. a. How would you form a portfolio that has an expected return of 9%? b. How would you form a portfolio that has a standard deviation of 6%?

Answer rating: 100% (QA)

a To form a portfolio that has an expected return of 9 we can use the following formula Expected ret... View the full answer