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Q1: Answer the questions based on the following graph: (a) How much is the risk-free rate? (b) What is the expected return of Portfolio O

image text in transcribed Q1: Answer the questions based on the following graph: (a) How much is the risk-free rate? (b) What is the expected return of Portfolio O and what is the standard deviation of Portfolio O? What is the Sharpe ratio of Portfolio O? [Hint: sp=pE(rp)rf ] (c) What is the slope of the capital allocation line (CAL)? (d) Why is Portfolio O efficient? And Why is Portfolio O the optimal risky portfolio for investors? (e) If you invest in 1 portfolio with 50% weight on Portfolio 0 and 50% in risk free asset, what is the expected return of your portfolio and what is the standard deviation of your portfolio

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