Problem 3 (10 points) Suppose that you have $1 million and the following two opportunities from which to construct a portfolio Risk free asset earning 10 per year Risky asset with expected return of 34 per year and standard deviation of 40 If you construct a portfolio with a standard deviation of 35 , what is its expected rate of return of the complete portfolio (Do not round your intermediate calculations Round your answer to 1 decimal place )

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Question: Problem 3: (10 points) Suppose that you have $1 million and the following two opportunities from which to construct a portfolio: Risk-free asset earning 10%

Problem 3: (10 points)

Suppose that you have $1 million and the following two opportunities from which to construct a portfolio:

Risk-free asset earning 10% per year.
Risky asset with expected return of 34% per year and standard deviation of 40%.

If you construct a portfolio with a standard deviation of 35%, what is its expected rate of return of the complete portfolio? (Do not round your intermediate calculations. Round your answer to 1 decimal place.)

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