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Assume that the expected return of the U.S. stock market is 10% and the volatility is 20%. Suppose that, instead of buying stocks, I choose
Assume that the expected return of the U.S. stock market is 10% and the volatility is 20%. Suppose that, instead of buying stocks, I choose to short-sell stocks all the time. What would be the expected return and volatility of my strategy?
I know the answer to this question was solved already but it is still really confusing. Can someone else try to explain everything a little more clearly. Thanks
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