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Suppose Ms. Cooper has $100,000 to invest and she looks at three assets: 1) the risk-free asset with the return of 4%, 2) the market
Suppose Ms. Cooper has $100,000 to invest and she looks at three assets: 1) the risk-free asset with the return of 4%, 2) the market portfolio with the expected return of 14% and the standard deviation of 20%, and 3) Fund A with the expected return of 20% and the standard deviation of 34%. Would you recommend fund A to Ms. Cooper? Why or why not?
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