Use the following information on the next two questions. Assume that the return and standard deviation of the market portfolio is 12% and 20%, respectively. Also assume that the risk-free rate is 3%. You decide to create a portfolio comprising the risk-free asset and the market portfolio. You want the portfolio to have a standard deviation of 25%. Find the expected return of your portfolio according to the CML.
.1825
.1725
.102
none of the above
Find the weight of the market portfolio in your portfolio.
80%
125%
158.33%
none of the above