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SupposeIntel's stock has an expected return of 24.0% and a volatility of 14.0%, whileCoca-Cola's has an expected return of 5.0% and volatility of 10.0%. If

SupposeIntel's stock has an expected return of 24.0% and a volatility of 14.0%, whileCoca-Cola's has an expected return of 5.0% and volatility of 10.0%. If these two stocks were perfectly negatively correlated(i.e., their correlation coefficient is 1),

a. Calculate the portfolio weights that remove all risk.

b. If there are no arbitrageopportunities, what is therisk-free rate of interest in thiseconomy?

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