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2. There is a market portfolio P with an expected return of 12 percent next year and a standard deviation of 15 percent. There is

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2. There is a market portfolio P with an expected return of 12 percent next year and a standard deviation of 15 percent. There is also a risk-free asset that returns 6 percent. (a) Your client wants an expected return of 8 percent. How should she divide up her assets between the market portfolio P and the risk-free asset? (b) What will be the standard deviation of the rate of return on her portfolio

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