Use the Table for the Question(s)below

question 83

Multiple Choice

Use the table for the question(s) below.
Consider the following expected returns,volatilities,and correlations:
-Consider a portfolio consisting of only Duke Energy and Microsoft.The percentage of your investment (portfolio weight) that you would place in Duke Energy stock to achieve a risk-free investment would be closest to:

• A)15%.
• B)80%.
• C)23%.
• D)10%.

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Definitions:

Mixed Cost

A cost that contains both variable and fixed cost components, changing in total with volume but remaining constant per unit.

Variable Cost

Costs that change in proportion to the good or service that a business produces, such as raw materials and direct labor expenses.

Fixed Cost

Expenses that do not change with the level of production or sales over a certain period, such as rent or salaries.

Period Cost

Costs that are expensed in the period in which they are incurred, without direct link to production activity, such as selling, general, and administrative expenses.