Here are some characteristics of two portfolios, the market index, and the risk-free asset. a. If you

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Here are some characteristics of two portfolios, the market index, and the risk-free asset.

Portfolio A Portfolio B Market index T-bills Expected Return 11% 14% 12% 6% Beta .8 1.5 1 0 Standard

a. If you currently hold a market-index portfolio, would you choose to add either portfolio A or B to your holdings? Explain. 

b. If instead you could invest only in bills and one of these portfolios, which would you choose?

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ISE Essentials Of Investments

ISBN: 9781265450090

12th International Edition

Authors: Zvi Bodie, Alex Kane, Alan Marcus

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