Suppose that many stocks are traded in the market and that it is possible to borrow at the risk-free rate, rƒ. the characteristics of two of the stocks are as follows: stock expected return standard deviation a 8 % 55 % b 4 % 45 % correlation = –1 a. calculate the expected rate of return on this risk-free portfolio?

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step-by-step explanation:

9-15%

47

step-by-step explanation:

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step-by-step explanation:

the solution of the equation is 2.23 ⇒ answer b

step-by-step explanation:

* lets revise the meaning of exponential function

- the form of the exponential function is y = ab^x, where a ≠ 0, b > 0 ,  

  b ≠ 1, and x is any real number

- it has a constant base b

- it has a variable exponent x

- to solve an exponential equation, take the log or ln of both sides,  

  and solve for the variable

* lets solve the problem

∵

- the base is 7 and the exponent is x

- insert ㏑ in both sides

∴

- use the rule

∴ x ㏑(7) = ㏑(77)

- to find x divide both sides by ㏑(7)

∴

* the solution of the equation is 2.23 to the nearest 2 decimal places