Answered

At Westonci.ca, we connect you with the answers you need, thanks to our active and informed community. Explore our Q&A platform to find reliable answers from a wide range of experts in different fields. Get detailed and accurate answers to your questions from a dedicated community of experts on our Q&A platform.

You are evaluating two investment alternatives. One is a passive market portfolio with an expected return of 10% and a standard deviation of 16%. The other is a fund that is actively managed by your broker. This fund has an expected return of 16% and a standard deviation of 20%. The risk-free rate is currently 7%. Answer the questions below based on this information. a. What is the slope of the Capital Market Line

Sagot :

Answer:

the  slope of the capital market line is 0.1875

Explanation:

The computation of the slope of the capital market line is shown below:

= (Expected return - risk free rate of return) ÷ (standard deviation)

= (10% - 7%) ÷ 16%

= 3% ÷ 16%

= 0.1875

hence, the  slope of the capital market line is 0.1875

We simply used the above formula to measured the slope of the capital market line

We appreciate your time. Please revisit us for more reliable answers to any questions you may have. Thanks for using our platform. We aim to provide accurate and up-to-date answers to all your queries. Come back soon. Westonci.ca is committed to providing accurate answers. Come back soon for more trustworthy information.