Question: You live in a world with three securities A, B , and C . You are provided with the following risk-return profile for the risky

You live in a world with three securities A, B, and C. You are provided with the following risk-return profile for the risky securities. Additionally, the correlation between securities A and B is 0.0, between securities A and C is -1.0, and between securities B and C is 0.0. The statistics represent the annualised expected return, annualized standard deviation and annualized correlations.

Security	Expected Returns	Standard Deviation
A	10%	18%
B	8%	22%
C	6%	20%

What is the implied one-year spot rate if no arbitrage opportunities exist? You live in a world with three securities A, B, and C.

You live in a world with three securities A, B, and C. You are provided with the following risk-return profile for the risky securities. Additionally, the correlation between securities A and B is 0.0 , between securities A and C is -1.0 , and between securities B and C is 0.0 . The statistics represent the annualised expected return, annualized standard deviation and annualized correlations. What is the implied one-year spot rate if no arbitrage opportunities exist? 1.12 0.92 8.11 3.00 3.77

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