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Find the risk-free portfolio that can be formed

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Reference no: EM132569778

Consider two perfectly negatively correlated risky securities A and B. A has an expected rate of return of 10% and a standard deviation of 16%. B has an expected rate of return of 8% and a standard deviation of 12%.

Question 1: The risk-free portfolio that can be formed with the two securities will earn an _____ rate of return

A. 8.5%

B. 9.0%

C. 9.9%

D. 8.9%

Reference no: EM132569778

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