Given an Optimal Risky Portfolio with Expected Return of 6

question 25

Multiple Choice

Given an optimal risky portfolio with expected return of 6%, standard deviation of 23%, and a risk free rate of 3%, what is the slope of the best feasible CAL?

• A) 0.64
• B) 0.39
• C) 0.08
• D) 0.13
• E) 0.36

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Definitions:

Non-Cancelable

A contract or policy clause that safeguards against cancellation before a specified date, ensuring a degree of stability or guarantee.

Service Life

The estimated period during which an asset is expected to be usable for its intended purpose, affecting depreciation calculations.

Fair Value

An estimate of a security's worth on a given market based on what a knowledgeable, willing, and unpressured buyer would likely pay to a knowledgeable, willing, and unpressured seller.