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 re = 5%. Your fund manages a risky portfolio, with the following details: p) = 13%, , = 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.) y 1 (0.61) (2.13): %

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