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You estimate that a passive portfolio invested to mimic the S&P 500 stock index yields an expected rate of return of 13% with a standard deviation of 25% Draw the CML and your fund’s CAL on an

You estimate that a passive portfolio invested to mimic the S&P 500 stock index yields an expected rate of return of 13% with a standard deviation of 25%. Draw the CML and your fund’s CAL on an expected return/standard deviation diagram. (LO 5-4)

  1. What is the slope of the CML?

  2. Characterize in one short paragraph the advantage of your fund over the passive fund.

Jun 17 2020 View more View Less

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