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Q5. Given the following information, please 1) draw the capital allocation line; 2) estimate the return and risk if you invest 150% of the money
Q5. Given the following information, please 1) draw the capital allocation line; 2) estimate the return and risk if you invest 150% of the money into security P; 3) calculate the reward-to-variability ratio; 4) explain the meaning of the reward-to-variability ratio; Interest rate Risky security P Return Bid: 4% Ask: 5% 12% Risk (Standard deviation) 10.56%
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