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Assume you manage an equity fund with an expected risk premium of 10% and a standard deviation of 40%. The return on Treasury bills is
Assume you manage an equity fund with an expected risk premium of 10% and a standard
deviation of 40%. The return on Treasury bills is 4%.
Your client chooses to invest $60,000 in your equity fund and $40,000 in T-bills. What is the expected return and standard deviation of your clients portfolio? Show the position of your client on the CAL you drew in the previous problem.
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