Risk Assets

  • February 3, 2011
  • David Marks
Risk Assets Imagine there are only two efficient portfolios of risky assets, EP1 and EP2.  EP1 offers 10% return and 4% risk.  EP2 offers 16% return and 20% risk.  An investor has $100 to invest and may borrow or lend at the same risk free rate of 4%.  Explain...