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2. Assume risk-free rate rf = 5%, the expected return of market portfolio E(rm) = 11% and volatility of market portfolio Om = 20% .

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2. Assume risk-free rate rf = 5%, the expected return of market portfolio E(rm) = 11% and volatility of market portfolio Om = 20% . Calculate the expected return and volatility of following portfolios, and also graphically demonstrate you results. Note: all portfolios are on the Capital Market Line. (1) Weight of market portfolio is 75%. (2)Weight of market portfolio is 125%

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