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Consider a risky fund with 18% standard deviation and 15% expected return. Also, the risk free rate is 5%. a. Write the Capital Allocation Line

Consider a risky fund with 18% standard deviation and 15% expected return. Also, the risk free rate is 5%.

a. Write the Capital Allocation Line equation.

b. Using the fund and the risk free asset, design a portfolio with 11% standard deviation (calculate the fund and the risk free assets weights) and report the portfolio expected return.

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