a
Adequate information:
Expected
Standard deviation of risky portfolio =25%
Expected return of active portfolio=18%
Standard deviation of active portfolio=28%
Risk-free rate=8%
To compute: The value when client switches 70% investment to passive portfolio and explain the disadvantages of the switch of investment.
Introduction:
Passive
b
Adequate information:
Expected rate of return of risky portfolio =13%
Standard deviation of risky portfolio =25%
Expected return of active portfolio=18%
Standard deviation of active portfolio=28%
Risk-free rate=8%
To compute: The slope of CAL with maximum chargeable fee .
Introduction:
Passive portfolio:
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