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lana [24]
1 year ago
6

If a portfolio had a return of 11 the risk-free asset return was 6, and the standard deviation of the portfolios excess returns

was 25 the premium would be:________
Business
1 answer:
Sindrei [870]1 year ago
4 0

The premium would be 5%

If a portfolio had a return of 11 the risk-free asset return was 6, and the standard deviation of the portfolios excess returns was 25 the premium would be 5%

Portfolio return = 11%

Risk free rate = 6%

Risk premium = Portfolio return - Risk free rate

                         = 11% - 6% =5%

So, the premium would be 5%

Premium is an amount paid periodically to the insurer by means of the insured for overlaying his chance.

Learn more about premium here- https://economictimes.indiatimes.com/definition/premium

#SPJ4

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