Question
1. In a market where the return on the market portfolio has an expected value of 6% and a standard deviation of 20%, an efficient
1. In a market where the return on the market portfolio has an expected value of 6% and a standard deviation of 20%, an efficient portfolio offers an expected return of 4% and a return volatility of 10%. What is the risk-free rate?
2.The market portfolio invests 60% in Stock A and 40% in Stock B. The expected return on the market portfolio is 6% and its return volatility is 20%. An investor wants to invest EUR 1,000 in an efficient portfolio with return volatility equal to 10%. If the return on the risk-free asset is 1%, how much will they invest in the risk- free asset (RF) and in the market portfolio?
3. In a market where the risk-free rate is 1% and the market portfolio offers an expeced return of 6%, an investor wants to have an efficient portfolio with expected return equal to 4%. What proportion should they invest in the market portfolio?
4.The market porfolio return is 6% and the standard deviation is 20%. An investor wants to invest 1000 euros in an efficient porfolio with return 10%. The risk free rate is 1%. What should be the investor allocation?
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