You currently own $100,000 worth of wal-mart stock.
suppose that wal-mart has an expected ret...
You currently own $100,000 worth of wal-mart stock.
suppose that wal-mart has an expected return of 14% and a volatility of 23%.
the market portfolio has an expected return of 12% and a volatility of 16%.
the risk-free rate is 5%.
assuming the capm assumptions hold, what alternative investment has the lowest possible volatility while having the same expected return as wal-mart?
what is the volatility of this portfolio?
Answers: 1
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