Compute the tangency portfolio weights

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Reference no: EM131414216

1. Compute the tangency portfolio weights assuming a risk-free asset yields 5 percent.

2. How does your answer to exercise 5.2 change if the risk-free rate is 3 percent? 7 percent?

Exercise 5.2

Compute the tangency portfolio weights assuming a risk-free asset yields 5 percent.

3. Draw a mean-standard deviation diagram and plot AOL, Microsoft, and Intel on this diagram as well as the three tangency portfolios found in exercises 5.2 and 5.3.

Reference no: EM131414216

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