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You have following information: Risk free return (rf) = 12% Stock market index return (Rm) = 15% Standard deviation of market (m) = 4% You
You have following information: Risk free return (rf) = 12% Stock market index return (Rm) = 15% Standard deviation of market (m) = 4% You would like to construct an efficient portfolio with 14% return. What proportion of your investment should be invested for government bonds and market portfolio? What is the standard deviation of your portfolio? Invest into Govt bonds: Invest into market portfolio: Standard deviation of the portfolio is
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