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Sort the presented four companies (from four components portfolio) with the following characteristics (Ri; oi; wi) - A (5%; 4.5%; 0.4); B (17%; 15%; 0.3);
Sort the presented four companies (from four components portfolio) with the following characteristics (Ri; oi; wi) - A (5%; 4.5%; 0.4); B (17%; 15%; 0.3); C (7%; 6%; -0.2); D (22%; 25%; WD) in terms of attractiveness for a rational investor. According to the portfolio theory, what criterion should a rational investor use? Provide the rate of return and risk of the portfolio created with D and the risk free instrument with rate of return equal to 4%, the weight of D instrument this portfolio (with the risk free instrument) is equal to WD from the above four components portfolio
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