Question
I need some direction on this one......................................................................................For the following questions, assume that the expected market return is 11% and that the risk free rate is
I need some direction on this one......................................................................................For the following questions, assume that the expected market return is 11% and that the risk free rate is 1.5%
You are relatively tolerant of risk and have a long investment horizon. Use the capital market line (CML) to estimate your portfolio return if you hold 10% of your portfolio in the risk free asset and 90% of your portfolio in the market.
Your best friend is highly risk averse and wants to hold an opposite portfolio. What would her return be if she held 90% of her portfolio in the risk free asset and 10% of her portfolio in the market?
Use Yahoo finance for the following part:
Download 11 years of annual historical prices for 3 companies and for the S&P 500 (^GSPC)
Get risk free data from Aswath Damodaran's website here
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