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Suppose that the risk-free rate is 5%. There are three risky portfolios A, B and C with expected returns 15%, 20%, and 25%, respectively, and standard deviations 5%, 10%, and 14%.

You can invest in the risk-free security and only one of the risky portfolios. Which one of them would you choose? What if the risk-free rate is 10%?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92856494

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