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Suppose that many stocks are traded in the market and that it is possible to borrow at the risk-free rate, rf. The characteristics of two

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Suppose that many stocks are traded in the market and that it is possible to borrow at the risk-free rate, rf. The characteristics of two of the stocks are as follows: Requlred: 2. Calculate the expected rate of return on this risk-free portfolio? (Hint: Can a particular stock portfolio be formed to create a "synthetic" risk-free asset?) (Round your answer to 2 declmal places.) p. Could the equilibrium rf be greater than rate of return? Yes No Suppose that many stocks are traded in the market and that it is possible to borrow at the risk-free rate, rf. The characteristics of two of the stocks are as follows: Requlred: 2. Calculate the expected rate of return on this risk-free portfolio? (Hint: Can a particular stock portfolio be formed to create a "synthetic" risk-free asset?) (Round your answer to 2 declmal places.) p. Could the equilibrium rf be greater than rate of return? Yes No

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