Your Friend Is Considering Investing in Portfolio Which They Expect

question 97

Essay

Your friend is considering investing in portfolio which they expect will generate a return of 14% and has a beta of 1.3. You know that historic expected return for the stock market is 12% and Government of Canada 90-Day treasury bills are currently yielding 1.0%. Explain to your friend why his potential investment is "inefficient".

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Definitions:

Opposite Sex

A term used to refer to the sex that is different from one's own, traditionally classified as male if one is female and female if one is male.

Organizing Principle

A core concept or ideology that forms the basis of a system, guiding its structure and operation.

Social Relations

Interactions between individuals and groups within a society, encompassing a wide range of social connections and dynamics.

Transsexuals

Individuals who have undergone medical procedures to change their physical sex to match their gender identity.