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Your Client, Bo Regard, Holds a Complete Portfolio That Consists

question 47

Multiple Choice

Your client, Bo Regard, holds a complete portfolio that consists of a portfolio of risky assets (P) and T-Bills. The information below refers to these assets. E(Rp) 12.00% Standard Deviation of P 7.20% T-Bill rate 3.60% Proportion of Complete Portfolio in P 80% Proportion of Complete Portfolio in T-Bills 20% Composition of P:  Stock A 40.00% Stock B 25.00% Stock C 35.00% Total 100.00%\begin{array} { l l } \mathrm { E } \left( \mathrm { R } _ { \mathrm { p } } \right) & 12.00 \% \\\text { Standard Deviation of P } & 7.20 \% \\\text { T-Bill rate } & 3.60 \% \\& \\\text { Proportion of Complete Portfolio in P } & 80 \% \\\text { Proportion of Complete Portfolio in T-Bills } & 20 \% \\& \\\text { Composition of P: } & \\\text { Stock A } & 40.00 \% \\\text { Stock B } & 25.00 \% \\\text { Stock C } & 35.00 \% \\\hline\text { Total } & \underline { 100.00 \% } \\\hline\end{array}
-What is the equation of Bo's Capital Allocation Line?


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