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April 23, 2014

Homework Help: finance

Posted by anonymous on Monday, November 12, 2012 at 8:19pm.

How does an investor earn more than the return generated by the tangency portfolio and still stay on the security market line?

a. Borrow at the risk free rate and invest in the tangency portfolio.

b. Add high risk/return assets to the portfolio.

c. Adjust the weight of stock in the portfolio to include more high return stocks.

d. It cannot be done.

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