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Opportunities from which to construct a portfolio

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Reference no: EM132465374

Suppose that you have $1 million and the following two opportunities from which to construct a portfolio:

  1. Risk-free asset earning 13% per year.
  2. Risky asset with expected return of 28% per year and standard deviation of 36%.

If you construct a portfolio with a standard deviation of 26%, what is its expected rate of return?

Reference no: EM132465374

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