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Business, 14.06.2021 17:20 puppycity78

You have $5,000 to invest and are deciding between investing in an equity mutual fund and Treasury bills. The fund has an expected return of 10% and a standard deviation of returns of 23%. T-bills have a return of 2%. Required:
a. If you put 77% into the mutual fund, what is your expected return?
b. What is the standard deviation of returns?
c. Since you're risk-averse, you are only willing to tolerate a standard deviation of 10% on the complete portfolio. How much money should you put into T-bills (in $)?
d. What's the Sharpe ratio of the complete portfolio with Ïc=10%?
e. If you wanted to achieve an expected return of 6% for the complete portfolio instead, how much money would you have to invest in the mutual fund (in $)?

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