Share
Explore BrainMass

Portfolio Construction: Expected Return and Risk-Free Rate

In the real world, is it possible to construct a portfolio of stocks that has an expected return equal to the risk-free rate? Provide examples.

Solution Preview

It is not possible to construct such portfolio because stocks cannot be risk-free. Even if we select blue chip stocks and build a relatively safer portfolio with low expected returns, an ...

Solution Summary

Discusses whether it is possible to construct a portfolio of stocks that has an expected return equal to the risk-free rate.

$2.19