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There are two risky stocks whose expected rates of returns are 8% and 10%, respectively. The risk free rate is 2%. Short selling of stocks
There are two risky stocks whose expected rates of returns are 8% and 10%, respectively. The risk free rate is 2%. Short selling of stocks is forbidden. You can only borrow up to 50% of your equity. The maximal rate of return of any portfolio in this economy must be: 15% O 10% The answer is unknown without knowing the correlation between the two risky assets 14% O 21%
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