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2. Consider two perfectly negatively correlated risky securities K and L. K has an expected rate of return of 13% and a standard deviation of

2. Consider two perfectly negatively correlated risky securities K and L. K has an expected rate of return of 13% and a standard deviation of 19%. L has an expected rate of return of 10% and a standard deviation of 16%. (7 points)

(c) What must the risk-free rate be in this economy with risky securities K and L? (2 points)

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