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You decide to invest 10,000 in a risky and risk-free combined portfolio. The risky asset with an expected rate of return of 12% and
You decide to invest 10,000 in a risky and risk-free combined portfolio. The risky asset with an expected rate of return of 12% and standard deviation of 21%. The risk-free T-bill with a rate of return of 4%. Assume you are average risk aversion (coefficient A = 5). The optimal complete portfolio should invest risk-free asset. in 7500 6372 3628 2500
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