Question
A portfolio lies on the capital market line. It has an expected return of 10% and a standard deviation of 8%. The standard deviation of
A portfolio lies on the capital market line. It has an expected return of 10% and a standard deviation of 8%. The standard deviation of the market portfolio is 5% and the risk-free rate is 3%. What is the market risk premium?
a) 4.38%
b) 5.33%
c) 6.02%
d) 8.13%
include formulas and calculations.
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Fundamentals Of Corporate Finance
Authors: Robert Parrino, David S. Kidwell, Thomas W. Bates
5th Edition
1119795435, 978-1119795438
