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If the expected returns on AT&T and Microsoft are 10% and 21% respectively, and their standard deviations are 15% and 25%, a) what is the
- If the expected returns on AT&T and Microsoft are 10% and 21% respectively, and their standard deviations are 15% and 25%, a) what is the minimum-risk (standard deviation) portfolio combining them if the correlation between the two stocks is 0.5? b) If the correlation is 0.1? c) What do you notice about the change in the allocations between AT&T and Microsoft as a function of the correlation coefficient, and why might this be? d) What are the standard deviations of these minimum-risk portfolios?
- With a riskless rate of 0.06, an equity market premium of 0.05, and a Capital Market Line of slope 0.75, what is the risk of the market portfolio assuming CAPM holds?
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Alexander Hamilton On Finance Credit And Debt
Authors: Richard Sylla
1st Edition
0231174012, 978-0231184571
