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3. Suppose a portfolio contains a risk-free financial security and a risky security, and that it is possible to lend and borrow at the risk-free
3. Suppose a portfolio contains a risk-free financial security and a risky security, and that it is possible to lend and borrow at the risk-free rate: A. The risk-free security delivers a positive return but it will not contribute to the overall volatility of the resulting portfolio. B. The resulting portfolio's expected return is given by a linear combination of the two individual expected returns. C. The resulting portfolio generates an infinite set of volatility- return combinations in which higher returns can be achieved by taking more volatility. D. All the above are correct
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