Suppose You Invest Equal Amounts in a Portfolio with an Expected

question 25

Multiple Choice

Suppose you invest equal amounts in a portfolio with an expected return of 16 percent and a standard deviation of returns of 18 percent and a risk-free asset with an interest rate of 4 percent.
Calculate the standard deviation of the returns on the resulting portfolio.

• A)8 percent
• B)10 percent
• C)20 percent
• D)9 percent

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