Your financial advisor has recommended that you diversify by placing some of the money in stocks and some in bonds. based upon current market conditions, she has recommended that the amount in bonds should equal three-fifths of the amount invested in stocks. how much should be invested in stocks? how much should be invested in bonds?

Two assets have the following expected returns and standard deviations when the risk-free rate is 5%: asset a e(ra) = 18.5% σa = 20% asset b e(rb) = 15% σb = 27% an investor with a risk aversion of a = 3 would find that on a risk-return basis. a. only asset a is acceptable b. only asset b is acceptable c. neither asset a nor asset b is acceptable d. both asset a and asset b are acceptable