Suppose that the CAPM is valid and that the market portfolio consists of 60% stocks and 40% bonds. The standard deviatio

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answerhappygod
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Suppose that the CAPM is valid and that the market portfolio consists of 60% stocks and 40% bonds. The standard deviatio

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Suppose that the CAPM is valid and that the market portfolioconsists of 60% stocks and 40% bonds. The standard deviation of theretuns on stocks and bonds are 20 and 10%, respectively. Thecorrelation between the returns on stocks and bonds is 0.25. Thesharpe ratio of the market portfolio is 0.4.
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