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The risk and return profile of a risky asset and the risk-free asset are presented in the table below. RE Risky asset 0.12 ER 0.02
The risk and return profile of a risky asset and the risk-free asset are presented in the table below. RE Risky asset 0.12 ER 0.02 Variance 0.03 Which of the following strategies has an expected outcome of $125? Assume starting wealth of $100. O Short-sell $170 of the risky asset and lend $270 at the risk-free rate Borrow $130 at the risk-free rate and invest $230 in the risky asset Short-sell S230 of the risky asset and lend $170 at the risk-free rate Borrow $170 at the risk-free rate and invest $230 in the risky asset Borrow $130 at the risk-free rate and invest $170 in the risky asset
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