Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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2. Assuming the following:
Average Return (Risky Portfolio) | 3.86% |
Standard Dev (Risky Portfolio) | 10.56% |
Average Risk Free Rate | 2.18% |
4.15% |
Using the formula: E(rc)=rf + y* (E(rp) - rf)
Solve for:
1. % of Risky Assets (y):
2. % of Risk Free Assets (1-y):
Note: You wish to generate a 7% return for your complete portfolio E(rc)
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