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1 0 . 5 . Assume that two investments are combined in a portfolio. a . In words, what is the expected rate of return
Assume that two investments are combined in a portfolio.
a In words, what is the expected rate of return on the portfolio?
b What condition must be present for the portfolio to have lower risk than the weighted average of the two investments?
c Is it possible for the portfolio to have lower risk than that of either investment?
d Is it possible for the portfolio to be riskless? If so what condition is necessary to create such a portfolio?
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