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Problem:

Dee Cousineau can earn a riskfree return of 6%. Dee expects the stock market to return 15% and exhibit a standard deviation of 20%.

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Question: If Dee chooses a portfolio of 60% stocks and 40% riskfree asset, calculate Dee's certainty equivalent return.

Note: Provide thorough explanation of the given question.

Accounting Basics, Accounting

  • Category:- Accounting Basics
  • Reference No.:- M91173718

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