An investor wants to form a two-asset portfolio consisting of Treasury bills with a return of 2.5% and a risky portfolio with an expected return of 15.2% and a standard deviation of 16%. The investor wants the expected return of the two asset portfolios to be 13%.

a. What fraction y of the investor’s funds should be invested in the risky portfolio?

b. What is the standard deviation of the two asset portfolio?

Answer rating: 100% (QA)

A Expected return of portfolio be computed as W1R11W1R2 ... View the full answer