Assume there are different risk-free rates for borrowing and lending, and R b 0 > R I
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Assume there are different risk-free rates for borrowing and lending, and Rb0 > RI0. Sketch the capital market curve graphically and explain what happens to the tangential portfolio.
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Ans Investing in a riskfree asset is frequently referred to as riskfree lending since investment in such assets tantamount to giving loan directly to ...View the full answer
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