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B) You are considering making a portfolio using stock A and risk-free asset. The expected return on A is 12% and its standard deviation is
B) You are considering making a portfolio using stock A and risk-free asset. The expected return on A is 12% and its standard deviation is 20%. The risk-free rate is 4%. If you want the standard deviation of portfolio return to be not greater than 15%, what is the highest expected return you can earn from the portfolio? (3 points)
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