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The risk-free rate is 3%. The return on a risky portfolio is 12%. The standard deviation of return on the risky portfolio is 30%. If
The risk-free rate is 3%. The return on a risky portfolio is 12%. The standard deviation of return on the risky portfolio is 30%. If the standard deviation on the complete portfolio is 24%, the expected return on the complete portfolio is O a. 17.5% Ob. 10.2 % O c. 14.3% O d. 16.2% Helen is considering the following two investments. First, a T-bill that pays 3%. Second, a stock mutual fund that pays a 20% return with a probability of 60% or a 6% return with a probability of 40%. The risk premium on the mutual fund is O a. 8.4% O b. 10.6% O c. 11.4% O d. 9.3%
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