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Question 7 Suppose a portfolio has the following return with respect to the risk free asset and the market portfolio: r p = rf +

Question 7

Suppose a portfolio has the following return with respect to the risk free asset and the market portfolio:

r_p = rf + _p + 0.7[r_M - rf]

Construct a strategy using the given portfolio, the risk-free asset, and the market portfolio that can earn alpha and has 0 risk.

Please show work :)

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