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Assume that the return of a risk-free asset is 5%, while the expected return and standard deviation of the risky asset are 15% and 20%,
Assume that the return of a risk-free asset is 5%, while the expected return and standard deviation of the risky asset are 15% and 20%, respectively. What percentages of your money must be invested in the risk-free asset and the risky asset, respectively, to form a portfolio with expected return of 10%?
A) 50% and 50%
B) 450% and 55%
C) 60% and 40%
D) 70% and 30%
E) cannot be determined
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