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...

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 Deviation A 8% 40% B 13 60 Could the equilibrium rf be greater than 10% ? (Hint : Can a particular stock portfolio be substituted for the risk-free asset ?)