You have invested in a portfolio of 60% in risky assets (Portfolio R) and 40% in T-bills. The risky portfolio is described below: E(rR)=12% σR =15% T-bill rate 3% Expected Return on Overall Portfolio is 8.4% What is the standard deviation of your overall portfolio?

You have invested in a portfolio of 60% in risky assets (Portfolio R) and 40% in T-bills. The risky portfolio is described below: E(rR)=12% σR =15% T-bill rate 3% Expected Return on Overall Portfolio is 8.4% What is the standard deviation of your overall portfolio?

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter8: Risk And Rates Of Return

Section: Chapter Questions

Problem 9PROB

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Question

INV 1 4b

You have invested in a portfolio of 60% in risky assets (Portfolio R) and 40% in T-bills. The risky portfolio is described below:

E(r_R)=12%

σ_R =15%

T-bill rate 3%

Expected Return on Overall Portfolio is 8.4%

What is the standard deviation of your overall portfolio?

Definition Definition Percentage gain or loss from a specific investment over time. The rate of return is the difference between the closing and initial values of an investment divided by the initial value of the investment. The closing value includes any intermediate cash flows such as dividends or interest amounts.

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