16. Suppose that you have $1 million and the following two opportunities from which to construct a...
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16. Suppose that you have $1 million and the following two opportunities from which to construct a portfolio:
a. Risk-free asset earning 12% per year.
b. Risky asset with expected return of 30% per year and standard deviation of 40%.
If you construct a portfolio with a standard deviation of 30%, what is its expected rate of return?
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