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Please find expected rate of return! Suppose that many stocks are traded in the market and that it is possible to borrow at the risk-free
Please find expected rate of return!
Suppose that many stocks are traded in the market and that it is possible to borrow at the risk-free rate, rf. The characteristics of two of the stocks are as follows: a. Calculate the expected rate of return on the risk-free portfolio? (Hint: Try to construct a risk-free portfolio using stocks A and B.) (Enter your answer as a percentage rounded to 2 decimal places.) b. Could the equilibrium f be greater than, equal to, or less than your answer in #a? greater than equal to less than Step by Step Solution
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