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There is an investment opportunity set where the optimal risky portfolio O has expected rate of return of 12% and volatility( or standard deviation) of
There is an investment opportunity set where the optimal risky portfolio O has expected rate of return of 12% and volatility( or standard deviation) of 25%, and T-bill yields a risk free rate of 2%.
1. Investor A chooses to invest 75 % in the portfolio O and 25% in T-bill. Compute the expected return and volatility of her portfolio, and its Sharpe ratio.
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