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This is all of the information I have been given for this question and am having difficulty setting it up properly. If you could please
This is all of the information I have been given for this question and am having difficulty setting it up properly. If you could please help with this practice problem I would greatly appreciate it!
5. You are given the following information about possible investments. Assume that apart for the risk-free asset these are the only tradable assets in this market. Asset Beta Real Estate Common Stocks Space Explorations Mean Return 12% 8% ?? Market Value $5 trillion $2 trillion $2.5 trillion Standard Deviation 15% 22.5% 15% 1.2 0.75 ?? 5.a What is the expected return on the market portfolio and what is the risk free rate in this economy (hint: you need to solve for them jointly)? 5.b What is the beta of Space Explorations? 5.c If the standard deviation of the market is 15%, without using the expected return on the market find the standard deviation of a portfolio that has the same expected return as an equal weighted portfolio of Real Estate and Common StocksStep by Step Solution
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