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Exercise 2 . Suppose you have a riskless security at 6 % and a market portfolio with a return of 1 8 % and a
Exercise
Suppose you have a riskless security at and a market portfolio with a return of and a
standard deviation of
How should you go about investing your money so that your investment will have a risk level of
Using the Capital Market Line CML
a Calculate the portfolio return.
b How much to invest in the riskless security?
c What will be the investor's investment strategy?
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