Answer:
13.85% and 18.9%
Explanation:
As in this exercise we have a free risk asset we will assume that the t-bill has a standard deviation of 0%, so let´s firts calculate the expected return:
[tex]E(r)=r_{1}*w_{1} +r_{2}*w_{2} +....+r_{n}*w_{n}[/tex]
where E(r) is the expected return, [tex]r_{i}[/tex] is the return of the i asset and [tex]w_{i}[/tex] is the investment in i asset, so applying to this particular case we have:
[tex]E(r)=17\%*65\%+8\%*35\%[/tex]
[tex]E(r)=13.85\%[/tex]
the calculation of standar deviation follows the same logic of the previous formula:
[tex]Sigma(r)=29\%*65\%+0\%*35\%[/tex]
[tex]Sigma(r)=18.9\%[/tex]
