3. Suppose that many stocks are traded in the market and that it is possible to borrow at the risk-free rate, rf. The characteristics of 2 of the stocks are as follows: Stock Expected Return Standard...

3. Suppose that many stocks are traded in the market and that it is possible to borrow at the risk-free rate, rf. The characteristics of 2 of the stocks are as follows:

Could the equilibrium rfbe greater than 10% ? (Hint : Can a particular stock portfoliobe substituted for the risk-free asset ?)