For Problems 27 through 29: You estimate that a passive portfolio, for example, one invested in a risky portfolio that mimics the S&P/TSX Composite stock index, yields an expected rate of return of 13% with a standard deviation of 25%. You manage an active portfolio with expected return 18% and standard deviation 28%. The risk-free rate is 8%. 29. Consider again the client in L Problem 19 with A = 3.5. a. If he chose to invest in the passive portfolio, what proportion, y, would he select? b. Is the fee (percentage of the investment in your fund, deducted at the end of the year) that you can charge to make the client indifferent between your fund and the passive strategy affected by his capital allocation decision (i.e., his choice of y)? For Problems 27 through 29: You estimate that a passive portfolio, for example, one invested in a risky portfolio that mimics the S&P/TSX Composite stock index, yields an expected rate of return of 13% with a standard deviation of 25%. You manage an active portfolio with expected return 18% and standard deviation 28%. The risk-free rate is 8%. 29. Consider again the client in L Problem 19 with A = 3.5. a. If he chose to invest in the passive portfolio, what proportion, y, would he select? b. Is the fee (percentage of the investment in your fund, deducted at the end of the year) that you can charge to make the client indifferent between your fund and the passive strategy affected by his capital allocation decision (i.e., his choice of y)