Assume there are just two risky securities in the market portfolio. Security A, which constitutes 40% of this portfolio, has an expected return of 10% and a standard deviation of 20%. Security B has an expected return of 15% and a standard deviation of 28%. If the correlation between the assets is 0.3 and the risk free rate 5%, calculate the capital market line.

Answer rating: 100% (QA)

To calculate the Capital Market Line CML we need to determine the expected return and standard devia... View the full answer