The t-bill rate is 7 you estimate that a passive portfolio


Assume that you manage a risky portfolio with an expected return of 17% and a standard deviation of 27%. The T-bill rate is 7%. You estimate that a passive portfolio invested to mimic the S&P 500 stock index yields an expected rate of return of 13% with a standard deviation of 25%. In Figure 1, draw the CML and your fund's CAL on an expected return/standard deviation diagram.

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Financial Management: The t-bill rate is 7 you estimate that a passive portfolio
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