Your friend James gladly told you that he invested $1000 in a technology company with an expected

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Your friend James gladly told you that he invested $1000 in a technology company with an expected return of 30% and a standard deviation of 30%. Assume that is his total portfolio. Currently, themarket portfolio has an expected return of 10% and a standard deviation of 5%. The risk-free rate ofreturn is 2%. Assume the CAPM holds. Can you help James construct a better investment portfolio?Explaincarefully withsupportingcalculations.

Posted Date: May 19, 2024 04:02 AM

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Your friend James gladly told you that he invested $1000 in a technology company with an expected

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