Question
Sara formed a portfolio by combining the risk-free asset and Asset A. The risk-free rate is 6% and asset A has an expected return
Sara formed a portfolio by combining the risk-free asset and Asset A. The risk-free rate is 6% and asset A has an expected return of 22% and standard deviation of 40%. The standard deviation of the portfolio is 30%. Using this information answer the following questions: a. How much is the standard deviation of the risk-free asset? b. How much is the weight of the risk-free asset? c. How much is the weight of the Asset A? How much is the expected return of Sara's portfolio?
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Statistics For Psychology
Authors: Arthur Aron, Elaine N. Aron, Elliot J. Coups
6th Edition
205258158, 978-0205258154
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