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Suppose that you have $1 million and the following two opportunities from which to construct a portfolio:

a. Risk-free asset earning 12% per year.

b. Risky asset with expected return of 26% per year and standard deviation of 41%.

If you construct a portfolio with a standard deviation of 28%, what is its expected rate of return? (Do not round your intermediate calculations. Round your answer to 1 decimal place. Omit the "%" sign in your response.)

Expected return on portfolio _______???

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92751541

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