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Raees has identified a risky portfolio which has an expected return of 1 3 % and a standard deviation of 8 % . The optimal

Raees has identified a risky portfolio which has an expected return of 13% and a standard deviation of 8%. The optimal investment in the risky portfolio for Raees is 150%. The risk- free rate is 0.6%.
(a) What is the reward-to-risk ratio of the optimal complete portfolio? (3 marks)(b) If the risk-free borrowing rate is 0.8% higher than the risk-free lending rate, what is
the new reward-to-risk ratio of this portfolio?

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