6 Suppose that many stocks are traded in the market and that it is possible to borrow at the risk-free rate, 14. The characteristics of two of the stocks are as follows: Stock Expected Return 9% 5% Standard Deviation 60% 40% A B 10 points Correlation = -1 Skipped Required: a. Calculate the expected rate of return on this risk-free portfolio? (Hint: Can a particular stock portfolio be formed to create a "synthetic risk-free asset?) (Round your answer to 2 decimal places.) eBook Rate of return % References b. Could the equilibrium rf be greater than rate of return? O Yes