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Show that the reward-to-variability ratio is the same for a risky portfolio, and a complete portfolio comprised of that risky portfolio and the risk free
Show that the reward-to-variability ratio is the same for a risky portfolio,
and a complete portfolio comprised of that risky portfolio and the risk free
asset. In other words show E(rC )rf / C = E(rP )rf / P where rC = yrP + (1
y)rf and y is the proportion of your portfolio in the risky portfolio P.
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