This preview shows page 1. Sign up to view the full content.
Unformatted text preview: What, if anything, does this imply about the comparative performance of the assets? (c) You are now told that a mean-variance efﬁcient portfolio, “ E ”, is available with μ E = 12% and σ E = 15% . What inferences can you draw from this information? 3. Consider a world with several risky assets and in which an investor can borrow at a given interest rate which is different (higher) than the rate at which the investor can lend. (a) Construct the efﬁcient portfolio frontier. (b) Depict an equilibrium for an investor who chooses to borrow. (c) Suppose that the interest rate at which the investor can borrow increases. Examine the implications for the investor’s optimal investment decisions. *****...
View Full Document
This note was uploaded on 03/21/2011 for the course ECON 6120 taught by Professor Crabbe during the Spring '11 term at University of Ottawa.
- Spring '11