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Question 4 Suppose that there are many stocks in the security market and that the characteristics of stocks A and B are given as follows:

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Question 4 Suppose that there are many stocks in the security market and that the characteristics of stocks A and B are given as follows: Standard Deviation = -1 Correlation Suppose that it is possible to borrow at the risk-free rate, If. What must be the Tvalue of the risk-free rate? (Hint: Think about constructing a risk-free portfolio from stocks A and B.)

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