The risk-free rate to the opportunity set which tangent is to be drawn. The result of the expected return and the standard deviation of the optimal portfolio are also to be determined. Introduction: The portfolio risk is defined as the combination of assets which carries its own risk with each investment. The standard deviation is used to determine that in which manner the values from a data set vary from its mean value. This is calculated by the square root of the variance. s t a n d a r d d e v i a t i o n = v a r i a n c e The expected return is defined as the return which is obtained on the risky asset that is expected in future.

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Answer 1

Question

Chapter 7, Problem 6PS

Summary Introduction

To calculate: The risk-free rate to the opportunity set which tangent is to be drawn. The result of the expected return and the standard deviation of the optimal portfolio are also to be determined.

Introduction: The portfolio risk is defined as the combination of assets which carries its own risk with each investment.

The standard deviation is used to determine that in which manner the values from a data set vary from its mean value. This is calculated by the square root of the variance.

standard deviation=variance

The expected return is defined as the return which is obtained on the risky asset that is expected in future.

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Answer 2

Question

Chapter 7, Problem 6PS

Summary Introduction

To calculate: The risk-free rate to the opportunity set which tangent is to be drawn. The result of the expected return and the standard deviation of the optimal portfolio are also to be determined.

Introduction: The portfolio risk is defined as the combination of assets which carries its own risk with each investment.

The standard deviation is used to determine that in which manner the values from a data set vary from its mean value. This is calculated by the square root of the variance.

standard deviation=variance

The expected return is defined as the return which is obtained on the risky asset that is expected in future.

Expert Solution & Answer

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Answer 3

Question

Chapter 7, Problem 6PS

Summary Introduction

To calculate: The risk-free rate to the opportunity set which tangent is to be drawn. The result of the expected return and the standard deviation of the optimal portfolio are also to be determined.

Introduction: The portfolio risk is defined as the combination of assets which carries its own risk with each investment.

The standard deviation is used to determine that in which manner the values from a data set vary from its mean value. This is calculated by the square root of the variance.

standard deviation=variance

The expected return is defined as the return which is obtained on the risky asset that is expected in future.

Expert Solution & Answer

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Answer 4

Question

Chapter 7, Problem 6PS

Summary Introduction

To calculate: The risk-free rate to the opportunity set which tangent is to be drawn. The result of the expected return and the standard deviation of the optimal portfolio are also to be determined.

Introduction: The portfolio risk is defined as the combination of assets which carries its own risk with each investment.

The standard deviation is used to determine that in which manner the values from a data set vary from its mean value. This is calculated by the square root of the variance.

standard deviation=variance

The expected return is defined as the return which is obtained on the risky asset that is expected in future.

Expert Solution & Answer

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Answer 5

Chapter 7, Problem 6PS

Summary Introduction

To calculate: The risk-free rate to the opportunity set which tangent is to be drawn. The result of the expected return and the standard deviation of the optimal portfolio are also to be determined.

Introduction: The portfolio risk is defined as the combination of assets which carries its own risk with each investment.

The standard deviation is used to determine that in which manner the values from a data set vary from its mean value. This is calculated by the square root of the variance.

standard deviation=variance

The expected return is defined as the return which is obtained on the risky asset that is expected in future.

Answer 6

Chapter 7, Problem 6PS

Summary Introduction

To calculate: The risk-free rate to the opportunity set which tangent is to be drawn. The result of the expected return and the standard deviation of the optimal portfolio are also to be determined.

Introduction: The portfolio risk is defined as the combination of assets which carries its own risk with each investment.

The standard deviation is used to determine that in which manner the values from a data set vary from its mean value. This is calculated by the square root of the variance.

standard deviation=variance

The expected return is defined as the return which is obtained on the risky asset that is expected in future.

Answer 7

Chapter 7, Problem 6PS

Summary Introduction

To calculate: The risk-free rate to the opportunity set which tangent is to be drawn. The result of the expected return and the standard deviation of the optimal portfolio are also to be determined.

Introduction: The portfolio risk is defined as the combination of assets which carries its own risk with each investment.

The standard deviation is used to determine that in which manner the values from a data set vary from its mean value. This is calculated by the square root of the variance.

standard deviation=variance

The expected return is defined as the return which is obtained on the risky asset that is expected in future.

Answer 8

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Answer 9

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Answer 11

Ch. 7 - Prob. 1PS Ch. 7 - Prob. 2PS Ch. 7 - Prob. 3PS Ch. 7 - Prob. 4PS Ch. 7 - Prob. 5PS Ch. 7 - Prob. 6PS Ch. 7 - Prob. 7PS Ch. 7 - Prob. 8PS Ch. 7 - Prob. 9PS Ch. 7 - Prob. 10PS

Solution Summary: The author defines portfolio risk as the combination of assets which carries its own risk with each investment. Optimal portfolios have high returns and less risk.

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