Question: Hi there, I need help on a problem. Copied and pasted below. Suppose that there are many stocks in the security market and that the

Hi there, I need help on a problem. Copied and pasted below.

Suppose that there are many stocks in the security market and that the characteristics of stocks A and Bare given as follows:

Stock	Expected Return			Standard Deviation
A		12	%		4	%
B		17			13
	Correlation = 1

Suppose that it is possible to borrow at the risk-free rate, r_f . What must be the value of the risk-free rate? (Hint: Think about constructing a risk-free portfolio from stocks A and B.) (Do not round intermediate calculations. Round your answer to 3 decimal places. Omit the "%" sign in your response.)

Risk-free rate

Thank you.

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