Suppose that optimal risky portfolio has an expected return of 16% and a variance of 0.04. The risk-free rate is 4%. a) Find the slope of Capital Market Line (Optimal Capital Allocation Line)? b) What is the expected return of a portfolio C, which is on Capital Market Line and has a standard deviation of 0.08?

Suppose that optimal risky portfolio has an expected return of 16% and a variance of 0.04. The risk-free rate is 4%. a) Find the slope of Capital Market Line (Optimal Capital Allocation Line)? b) What is the expected return of a portfolio C, which is on Capital Market Line and has a standard deviation of 0.08?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter8: Analysis Of Risk And Return

Section: Chapter Questions

Problem 13QTD

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