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consider the following information about a stock fund and a risk-free asset: E(rp) = 12.5% op...

consider the following information about a stock fund and a risk-free asset: E(rp) = 12.5% op = 16% rf = 3.5% (28) you want to invest a proportion of your total investment budget in the stock fund to provide an expected rate of return on you overall or complete portfolio equal to 5%. what proportion should you invest in the stock fund, P, and what proportion in the risk-free asset? what is the standard deviation of the rate of return on your total portfolio? you are considering the highest return possible subject to the constraint that you limit his standard deviation to be no more than 12%. which portfolio (a, b, or c) is more appropriate if you were risk averse?

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