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There is a risky portfolio of multiple stocks with an expected return of 15% and a standard deviation of 24%. Jason invests 60% of his
There is a risky portfolio of multiple stocks with an expected return of 15% and a standard deviation of 24%. Jason invests 60% of his total wealth on this risky portfolio and the rest 40% on Treasury bills. One-year T-bill rate is 4%. a. Calculate the expected return and standard deviation of his complete portfolio b. Calculate his risk premium of the risky portfolio as well as of the complete portfolio c. Compute the Sharpe ratio d. Draw the capital allocation line
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