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You like to invest $10,000 in a complete portfolio. The complete portfolio is composed of a risky asset with an expected rate of return of
You like to invest $10,000 in a complete portfolio. The complete portfolio is composed of a risky asset with an expected rate of return of 12% and a standard deviation of 15% . How much money should be invested in the risky asset to form a portfolio with an expected return of 9%? (assume that the risk free rate is 5%) Also what is the standard deviation of the complete portfolio in the problem?
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