Description of this paper

Suppose that many stocks are traded in the market...

Description

Solution


Question

Suppose that many stocks are traded in the market and that it is possible to borrow at the risk-free rate. The characteristics of two of the stocks are as follows: Stock A - Expected Return = 10% Standard Deviation = 40% Stock B Expected Return = 16% Standard Deviation = 60% Calculate the expected rate of return on this risk-free portfolio?

 

Paper#8913 | Written in 18-Jul-2015

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