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You are managing a portfolio with an expected return equal to 12% and standard deviation equal to 24%. The risk-free rate equals 6%. Assume your
You are managing a portfolio with an expected return equal to 12% and standard deviation equal to 24%. The risk-free rate equals 6%. Assume your client states that she has a target expected return equal to 9%.
Using the CAL, what is the standard deviation associated with her optimal investment combination?
Your client has a target standard deviation equal to 12%. What is the appropriate allocation to the optimal risky portfolio that will satisfy your clients risk tolerance?
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