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2) Suppose that the risk-free rate is 6 percent and the expected return on the investor's tangency portfolio is 14 percent, with a standard
2) Suppose that the risk-free rate is 6 percent and the expected return on the investor's tangency portfolio is 14 percent, with a standard deviation of 20 percent. a. Calculate the investor's expected risk premium per unit of risk. b. Calculate the portfolio's expected return if the portfolio's standard deviation of return is 26 percent.
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