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5. You are constructing a portfolio of two stocks A and B out of the many stocks available in the securities market. The characteristics of

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5. You are constructing a portfolio of two stocks A and B out of the many stocks available in the securities market. The characteristics of these stocks are: Stock Expected Return Standard Deviation A 10% 16% B 7% 12% Correlation Between A and B = -1 Suppose it is possible to borrow at the risk-free rate Rf, what is the value of the risk- free rate? Hint: Think about constructing a risk-free portfolio from A and B

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