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Consider the following assets: Asset A Standard Deviation: 30% Beta: 1 Market portfolio, M: Expected Return: 8% Standard Deviation: 15% Risk-free asset: 2% Currently all
Consider the following assets:
Asset A
Standard Deviation: 30%
Beta: 1
Market portfolio, M:
Expected Return: 8%
Standard Deviation: 15%
Risk-free asset: 2%
Currently all your clients funds are invested in stock A.
(b) Draw the capital market line (CML) and show the position of stock A. (3 marks)
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