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Risk and return data of the two assets

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Reference no: EM132681721

Asset A offers an expected rate of return of 10% with a standard deviation of 25%. Asset B offers an expected rate of return of 5% with a standard deviation of 30%. Assume that the risk-free interest rate is zero.

(a) Given that risk and return data of the two assets, would anyone choose to hold Asset B? Explain your answer graphically. [Hint: Can provide verbal support to the graph, if necessary, in no more than two lines.]

Reference no: EM132681721

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