Suppose the expected return on the tangent portfolio is 10% and its volatility is 40%. The risk-free rate is 2%. (a) What is the equation of the Capital Market Line (CML)? (b) What is the standard deviation of an efficient portfolio whose expected return of 8%? How would you allocate $1,000 to achieve this position
Suppose the expected return on the tangent portfolio is 10% and its volatility is 40%. The risk-free rate is 2%. (a) What is the equation of the Capital Market Line (CML)? (b) What is the standard deviation of an efficient portfolio whose expected return of 8%? How would you allocate $1,000 to achieve this position
Chapter8: Analysis Of Risk And Return
Section: Chapter Questions
Problem 13P
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Suppose the expected return on the tangent portfolio is 10% and its volatility is 40%.
The risk-free rate is 2%.
(a) What is the equation of the Capital Market Line (CML)?
(b) What is the standard deviation of an efficient portfolio whose expected return of
8%? How would you allocate $1,000 to achieve this position
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