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A treasury bill pays a 6% rate of return. The market portfolio pays 15% with a probability of 20% or 3.875% with a probability of 80%.

What percent of wealth would a risk-neutral investor allocate to the market portfolio? Explain.

The response must be typed, single spaced, must be in times new roman font (size 12) and must follow the APA format.

Financial Management, Finance

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