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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, r f .

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:
\table[[Stock,\table[[Expected],[Return]],\table[[Standard],[Deviation]]],[A,8%,40%
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