Jessica wants to use her savings to invest in the share market. She knows that the...
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Jessica wants to use her savings to invest in the share market. She knows that the market portfolio has a standard deviation of 30 percent and an expected return of 15 percent. The risk-free rate is 8 percent. a) Calculate the expected return of a well-diversified portfolio with a standard deviation of 10 percent. b) Calculate the standard deviation of a well-diversified portfolio with an expected return of 25 percent. Jessica wants to use her savings to invest in the share market. She knows that the market portfolio has a standard deviation of 30 percent and an expected return of 15 percent. The risk-free rate is 8 percent. a) Calculate the expected return of a well-diversified portfolio with a standard deviation of 10 percent. b) Calculate the standard deviation of a well-diversified portfolio with an expected return of 25 percent.
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a Expected return by investing in market portfolio ERm 30 Standard Deviation of ret... View the full answer
Related Book For
Fundamentals Of Corporate Finance
ISBN: 9780135811603
5th Edition
Authors: Jonathan Berk, Peter DeMarzo, Jarrad Harford
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