If i make a portfolio (50% risky assets, and 50% risk free assets) what is the results in return?

Question

Can i make a STANDARD DEVIATION for the portfolio? and why??

Answer 1

Yes, but you are asking what happens to be a very controversial question. If I didn't think you were an undergraduate, I would tell you "no."

The return is Rf, the risk free rate, plus 1/2 Re, or the excess return from the risky assets (Rr) or (Rr-Rf)-Re...so return is Rf+1/2Re.

Standard deviation is 0*(1/2)^2+Variance(Re)*(1/2)^2 or

1/4*variance of excess return.