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Question 7: Suppose that you have $1 million and the following two opportunities from which to construct a portfolio: Risk-free asset earning 10% per year;

Question 7: Suppose that you have $1 million and the following two opportunities from which to construct a portfolio: Risk-free asset earning 10% per year; Risky asset with expected return of 29% per year and a standard deviation of 39%. If you construct a portfolio with a standard deviation of 28%, what will be the rate of return?

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