The market portfolio has expected return of 12% and risk of 18%. The risk free rate...
The market portfolio has expected return of 12% and risk of 18%. The risk free rate is 3%. According to CML, if you want to achieve 15% return, how much risk does your portfolio has to have?
Homework Answers
Equation of CML=3%+(12%-3%)/18%*standard deviation
Standard deviation=(15%-3%)/(12%-3%)*18%=24.000%
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The market portfolio has expected return of 12% and risk of 18%.
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