You are an investor and you have access to one risky asset and one risk$-$free asset. The risky asset has an expected return of $12\mathrm{.}8\%,$ with a volatility of $15\%.$ The risk$-$free rate offers $0\mathrm{.}6\%.$ You goal is to create a portfolio with an expected return of $8\mathrm{.}7\%.$ What proportion of your investment do you need to put in the risky asset?

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To calculate the proportion of your investment that needs to be put in the risky asset to achieve an ... View the full answer