Multiple Choice
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%.
The risk-free portfolio that can be formed with the two securities will earn a(n) _____ rate of return.
A) 8.5%
B) 9.0%
C) 8.9%
D) 9.9%
Correct Answer:
Verified
Correct Answer:
Verified
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