# The risk-free rate is 1%. The standard deviation of market returns is 20%. An investor with A

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## Question:

The risk-free rate is 1%. The standard deviation of market returns is 20%. An investor with A = 3 expects the market return to be −8% next year. What is the standard deviation of the optimal combination of risk-free security and market portfolio for this investor?

**Related Book For**

## Intermediate Financial Management

ISBN: 978-1111530266

11th edition

Authors: Eugene F. Brigham, Phillip R. Daves