Chapter 6 Assignment i Saved Help Save & Exit Submit Check my work 5 Suppose that many stocks are traded in the market and that it is possible to borrow at the risk-free rate, rf. The characteristics of two of the stocks are as follows: 20 points Stock Expected Return 5% 8% Standard Deviation 20% 80% A Skipped B Correlation = -1 eBook Required: a. Calculate the expected rate of return on this risk-free portfolio? (Hint: Can a particular stock portfolio be formed to create a "synthetic risk-free asset?) (Round your answer to 2 decimal places.) Print References Rate of return % b. Could the equilibrium rf be greater than rate of return? Yes O No