Three friends each own portfolios consisting of a diversified stock index fund and short term risk-free Treasury bills.
4. Three friends each own portfolios consisting of a diversified stock index fund and short term risk-free Treasury bills. The risk-free rate of return is Rf = 4% and the stock market index fund has an expected return of Rmbar = 10% with a standard deviation of σm = 6%. For each friend, find the portfolio weights for each investment (wm and wrf ), the […]
