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Please show step by step thank you. Suppose there are two risky assets in the economy. Asset 1 has expected return of 10% and a
Please show step by step thank you.
Suppose there are two risky assets in the economy. Asset 1 has expected return of 10% and a standard deviation of 15%. Asset 2 has an expected return of 14% and a standard deviation of 20%. The correlation between these two asset is 1. Consider a portfolio with 40% of asset 1 and 60% of asset two. Measure the level of risk for this portfolio. Now assume that in addition to the two risky asset, there a riskless asset with an expected return of 5% and you have a portfolio with 50% invested in the riskless asset. The remaining of your wealth is invested in the portfolio in What are the expected return and standard deviation for this portfolio
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