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Percentage return on your hedge portfolio

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You buy $2000 worth of Stock J and simultaneously short-sell $1000 of Stock K. Over the following year, the return on Stock J is 12.6% and the return on Stock K is 19.6%. The risk-free rate in the economy is 4%. What is the percentage return on your hedge portfolio? Go out three decimal places - for example, write 7.2% as .072.

Reference no: EM132505883

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