Question
Suppose you have the following investment options available: (a) Risk-free asset with a rate of return 8%, and (b) Risky asset earning an expected return
Suppose you have the following investment options available: (a) Risk-free asset with a rate of return 8%, and (b) Risky asset earning an expected return 20%, and standard deviation 40%. If you construct a portfolio of the above two instruments with a standard deviation of 30%, what will the expected return of your portfolio be?
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Intermediate Microeconomics
Authors: Hal R. Varian
9th edition
978-0393123975, 393123979, 393123960, 978-0393919677, 393919676, 978-0393123968
