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you will only be awarded full points if you answer all parts of the question! Assume that the expected rate of return on the market
you will only be awarded full points if you answer all parts of the question!
Assume that the expected rate of return on the market Portfolio is 23% and the rate of return on T-bills (the risk-free rate) is 7%. The standard deviation of the market is 32%. Assume that the market portfolio is efficient. What is the equation of the capital market line? If an expected return of 39% is desired, what is the standard deviation of this position? If you have $1,000 to invest, how should you allocate it to achieve the above position? If you invest $300 in the risk-free asset and $700 in the market portfolio, how much money should you expect to have at the end of the year
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