You invest 80% of your portfolio in a risky portfolio that has an expected rate of return of 15% and a standard deviation of 21%, and the rest in T-bill with a 2% rate. What is the expected return of your portfolio? Enter your answer as a decimal number, rounded to three decimal places.

You invest 80% of your portfolio in a risky portfolio that has an expected rate of return of 15% and a standard deviation of 21%, and the rest in T-bill with a 2% rate. What is the expected return of your portfolio? Enter your answer as a decimal number, rounded to three decimal places.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter8: Analysis Of Risk And Return

Section: Chapter Questions

Problem 14P

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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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