The market portfolio has an expected return of 11 percent and a standard deviation of 19 percent.
Question:
The market portfolio has an expected return of 11 percent and a standard deviation of 19 percent. The risk-free rate is 4.3 percent.
a. What is the expected return on a well-diversified portfolio with a standard deviation of 9 percent?
b. What is the standard deviation of a well-diversified portfolio with an expected return of 20 percent?
Expected ReturnThe expected return is the profit or loss an investor anticipates on an investment that has known or anticipated rates of return (RoR). It is calculated by multiplying potential outcomes by the chances of them occurring and then totaling these... Portfolio
A portfolio is a grouping of financial assets such as stocks, bonds, commodities, currencies and cash equivalents, as well as their fund counterparts, including mutual, exchange-traded and closed funds. A portfolio can also consist of non-publicly...
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Related Book For 
Corporate Finance
ISBN: 978-0077861759
11th edition
Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe, Bradford Jordan
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