1) You manage a risky fund with an expected rate of return of 15% and a standard deviation of 20%. The risk-free rate is 5%. a. You client has $1000 to invest. She borrows another $500 at the...

1) You manage a risky fund with an expected rate of return of 15% and a standard deviation of 20%. The risk-free rate is 5%. a. You client has $1000 to invest. She borrows another $500 at the risk-free rate and invests the $1500 in your fund. What is the expected return and standard deviation of your client’s portfolio? (2 points)b. What’s the Sharpe ratio of your risky fund and your client’s overall portfolio? (3 points)
c. Draw the CAL of your fund on an expected return/standard deviation diagram. What’s the slope of the CAL? Show the position of your fund and your client’s portfolio on your fund’s CAL. (5 points)