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In a hypothetical world of a risk-free asset Rf and three risky assets A, B, and C. Suppose the CAPM holds. Answer the required questions with the information about A, B, C, and the market portfolio (M) constructed using them provided in the table below.
Asset A
Asset B
Asset C
Expected return
10%
14%
11%
Standard deviation
15%
20%
16%
Assets' Weights of the Market Portfolio (M)
25.34%
37.29%
37.37%
Correlation matrix
1
0.4
0.2
0.3
QUESTIONS
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