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Aasir can invest his money in risk-free asset and/or in a fund F. The risk-free asset...

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Finance

Aasir can invest his money in risk-free asset and/or in afund F. The risk-free asset provides a guaranteed return of 4%. Thefund F provides expected return of 12% with

volatility of 25%. If Aasir wants to limit his risk to nomore than 20%, what is the highest expected return he can earn? IfAasir wants an expected return of at least 16%, what isthe

minimum possible volatility of his portfolio?

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