What happens to your portfolio allocation

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Problem

Suppose A=4 as in [Investment with leverage cost. Suppose that you can save at the risk-free rate of 1% but you can only borrow at 2%. Suppose that E[Rs] = 8%, σs = 15%. What is your portfolio allocation w in stocks if A=4?]. Get the instant assignment help. The expected return on stocks goes up a little bit (more than 8% but say less than 8.5%). What happens to your portfolio allocation?

Reference no: EM133981234

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