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Using the Formula for the Capital Market Line (Formula 21-5)

question 9

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Using the formula for the capital market line (Formula 21-5) , if the risk-free rate (RF) is 6%, the market rate of return (KM) is 12%, the market standard deviation (σM) is 11%, and the standard deviation of the portfolio (σP) is 14%, compute the anticipated return of the portfolio (KP) .


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