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financeboy
May 19, 2014, 05:54 AM
A capital market in equilibrium provides investors with an opportunity to both borrow and lend risk-free. The two efficient portfolios X and Y have the following expected returns and risk:

E(Rx) = 26% Std. dev.(Rx) = 15%
E(Ry) = 18% Std. dev.(Ry) = 9%

What is the risk-free rate of return?