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?

Answer rating: 100% (QA)

This can be calculated using the following formula p sqrtA2 m2 1 A2 f2 where p is the stand... View the full answer