Question: Suppose that the borrowing rate that your client faces is 9%. Assume that the S&P500 index has an expected return of 13% and standard deviation

Suppose that the borrowing rate that your client faces is 9%. Assume that the S&P500 index has an expected return of 13% and standard deviation of 25%, and that you manage a fund that has an expected return of 14% and a standard deviation of 20%. The risk free rate is 5%. What is the largest percentage fee that a client who currently is lending (y<1) will be willing to pay to invest in your fund?

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