What is the optimal risky portfolio that is formed by the


An investment manager has done some calculations for the stock of Dow Chemical with the following results: Alpha = -5% , Beta = 0.9 , σ (e)=25%. The risk free rate is 6%. The expected return on the S&P is 14% and the standard deviation is 21%.

What is the optimal risky portfolio that is formed by the Dow chemical and the S&P 500? Show your work.

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Financial Management: What is the optimal risky portfolio that is formed by the
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