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Given the following information, please draw the capital allocation line; estimate the return and risk if you invest 200% of the money into security P;
Given the following information, please
- draw the capital allocation line;
- estimate the return and risk if you invest 200% of the money into security P;
- calculate the reward-to-variability ratio; explain the meaning of the reward-to-variability ratio;
|
| Interest rate | Risky security P |
| Return | Bid: 1% Ask: 3% | 15% |
| Risk (Standard deviation) |
| 25% |
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Money Talks Explaining How Money Really Works
Authors: Nina Bandelj ,Frederick F. Wherry ,Viviana A. Zelizer
1st Edition
0691202893, 978-0691202891
