7 calculate the required rate of return a 56 b 76

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Unformatted text preview: k ­free rate, there is one BEST efficient risky portfolio to hold, the tangency portfolio (identified by the tangent point of the capital market line and the efficient frontier). a. True b. False ANS: A 11. In the presence of a risk ­free asset, the investor's job is to: I) invest in the market portfolio II) borrow or lend at the risk ­free rate A. I only B. II only C. I and II ANS: C D. Portfolio Risk and Capital Asset Pricing Model (Slides 43  ­ END) 12. Given the following data: risk ­free rate = 4%, average risk premium = 7.7%. Calculate the required rate of...
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This note was uploaded on 07/31/2013 for the course FIN 504 taught by Professor Harper,j during the Summer '08 term at Texas A&M University–Commerce.

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