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Assume that you have invested half of your wealth in a risk free asset A and half in a risky portfolio B. Is it theoretically
Assume that you have invested half of your wealth in a risk free asset A and half in a risky portfolio B. Is it theoretically possible to lower your portfolio risk if you move your risk free asset holdings (A) into another risky portfolio C? In other words, can you ever reduce your risk more by buying a risky security than by buying a risk free asset?
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