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How much risk reduction could you achieve

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Reference no: EM133061830

You are holding a portfolio of stocks where the beta of your portfolio is 2 and its correlation with the market portfolio, M , is 0.5. The risk free rate is 5%, the expected market return is 10%, and the standard deviation of the market return is 15%. How much risk reduction could you achieve, at no sacrifice in expected return, by making your portfolio an efficient one?

Reference no: EM133061830

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