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Question 1 Answer the following questions using the data in the table below: Risk Free rate 3% company Expected Return risk Giants 14% 20% Colts
Question 1
Answer the following questions using the data in the table below:
Risk Free rate 3%
| company | Expected Return | risk |
| Giants | 14% | 20% |
| Colts | 11% | 15% |
| Dolphins | 8% | 9% |
- Which portfolio above would be considered the market portfolio? Show why
- What combination on the capital market line will produce a return of 6%? Comment on this portfolio (weighting); with regards to what it represents and how you would achieve it (construction)
- What combination will produce a return of 15%? Comment on this portfolio (weighting); with regards to what it represents and how you would achieve it (construction)
- What is the risk (as measured by standard deviation) of the portfolio you calculated in b and c?
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Handbook Of Financial Econometrics
Authors: Yacine Ait-Sahalia, Lars Peter Hansen
1st Edition
044450897X, 978-0444508973
