Suppose you have the following two investments available to you: Risk-free asset, expected return 4%...
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Finance
Suppose you have the following two investments available to you: Risk-free asset, expected return 4% Risky asset, expected return 12%, volatility 15%
a) How would you construct a portfolio with an expected return of 14%?
b) If the return on the risky asset during the following year (after constructing the portfolio in part (a)) was 18%, what was the return on the portfolio?
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