Question
Assume that both portfolios A and B are well diversified, that E ( r A ) = 10%, and E ( r B ) =
Assume that both portfolios A and B are well diversified, that E(rA) = 10%, and E(rB) = 8%. If the economy has only one factor, and A = 1.4, whereas B = 1.0, what must be the risk-free rate? (Do not round intermediate calculations.)
Risk-free rate: %
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Financial Markets And Institutions
Authors: Anthony Saunders, Marcia Cornett
4th Edition
0077262379, 978-0077262372
