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Johnson requests the portfolio standard deviation to equal one half the market portfolio standard deviation. The market portfolio Sm = 20%, which implies Sp=10%. The

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Johnson requests the portfolio standard deviation to equal one half the market portfolio standard deviation. The market portfolio Sm = 20%, which implies Sp=10%. The intercept of the CML equal, = 0.05 Pand the slope of the CML equals the Sharpe ratio for the market portfolio (35%). Therefore using the CML E(rp)

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