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suppose that you construct a complete portfolio and your assets (or portfolio) are equally weighted. A risk-free rate of return is 5%. An expected rate
suppose that you construct a complete portfolio and your assets (or portfolio) are equally weighted. A risk-free rate of return is 5%. An expected rate on a risky portfolio and standard deviation of this risky portfolio are 9% and 20 % respectively.
What is the expected rate of return on the complete portfolio?
What is the standard deviation of this portfolio?
Compute how much this excess return can be compensated by its portfolio risk?
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