# Question

State three of the most important assumptions underlying Markowitz’s notion of efficient portfolios.

## Answer to relevant Questions

FinCorp Inc. conducted an extensive analysis of the economy and concluded that the probability of a recession next year is 35 percent, the probability of a boom is 45 percent, and the probability of a stable economy is 20 ...1. What is the expected return and standard deviation of a portfolio consisting of $2,500 invested in a risk-free asset with an 8-percent rate of return, and $7,500 invested in a risky security with a 20-percent rate of ...Calculate the missing values for the following five efficient portfolios. The expected return on the market is 8 percent, with a standard deviation of 5 percent, and the risk-free rate is 2percent.The current price of a stock is $20. It is expected to rise to $22 in one year and pay an annual dividend of $0.50 during the year. The RF is 5 percent; the ERM is 9 percent, and the stock’s beta is 2.6. Determine whether ...Jackie borrowed $500 at the risk-free rate of 8 percent. She invested the borrowed money and her own money of $1,500 in a portfolio with a 15-percent rate of return and a 30-percent standard deviation. What is the expected ...Post your question

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