Question: Suppose that the borrowing rate that your client faces is 12%. Assume that the equity market index has an expected return of 15% and

Suppose that the borrowing rate that your client faces is 12%. Assume

Suppose that the borrowing rate that your client faces is 12%. Assume that the equity market index has an expected return of 15% and standard deviation of 25%. Also assume that the risk-free rate is rf = 3%. Your fund manages a risky portfolio, with the following details: E(rp) = 15%, p = 24%. 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? What about a client who is borrowing (y> 1)? (Negative values should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to 2 decimal places.) y 1 % %

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