The expected return of a risky portfolio in New Zealand over 2022 is 15%, while the risk-free rate is 7%. Terry wishes to set up a complete portfolio, with y (the proportion invested in the risky portfolio) = 0.75.
REQUIRED:
i. Define a “complete portfolio”.
ii. Describe the mix (or asset allocation) of Terry’s complete portfolio, including the percentages of each asset held.
iii. What is the expected return of Terry’s complete portfolio?
iv. What is the standard deviation of returns for Terry’s complete portfolio?
v. What is the Sharpe ratio for Terry’s complete portfolio?

Answer rating: 100% (QA)

1 A complete portfolio is basically a portfolio which has a mix of risky and risk free asset It is g... View the full answer