Question

Solve problems 20 and 21 for a client who uses your fund rather than an index fund.
Problems 20– 23 are based on the following assumptions. Suppose that the lending rate is rf = 5 percent, while the borrowing rate that your client faces is 9 percent. Continue to assume that the passive port-folio has an expected return of 13 percent and a standard deviation of 25 percent. Your fund here has rp = 11 percent and σp = 15 percent.
Suppose that the lending rate is rf = 5 percent, while the borrowing rate that your client faces is 9 percent. Continue to assume that the passive port-folio has an expected return of 13 percent and a standard deviation of 25 percent. Your fund here has rp = 11 percent and σp = 15 percent.


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  • CreatedJune 21, 2015
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