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Homework answers / question archive / Suppose you manage a client portfolio and use the Capital Market Line to make allocation decisions
Suppose you manage a client portfolio and use the Capital Market Line to make allocation decisions. The market portfolio has an expected return of 10%, and a standard deviation of 10%. The risk-free asset has an expected return of 3%. Your client wants you to create a portfolio on the CML with a standard deviation of 6%. What expected return can you provide for the client? Please enter your answer in percent rounded to the nearest basis point.
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