Question: Suppose that the borrowing rate that your client faces is 11%. Assume that the S&P 500 index has an expected return of 16% and standard

Suppose that the borrowing rate that your client faces is 11%.

Suppose that the borrowing rate that your client faces is 11%. Assume that the S&P 500 index has an expected return of 16% and standard deviation of 23%. Also assume that the risk-free rate is 14 = 5%. Your fund manages a risky portfolio, with the following details: Er) = 13%, Op = 18%. What is the largest percentage fee that a client who currently is lending (y 1)? (Negative values should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to 2 decimal places.) Answer is complete but not entirely correct. % y 1 (0.61) 0.00 %

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