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Consider a risky fund with 2 0 % standard deviation and 1 6 % expected return. Also, the risk free rate is 4 % .

Consider a risky fund with 20% standard deviation and 16% expected return. Also, the risk
free rate is 4%.
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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