Given an Optimal Risky Portfolio with Expected Return of 20

question 58

Multiple Choice

Given an optimal risky portfolio with expected return of 20%, standard deviation of 24%, and a risk free rate of 7%, what is the slope of the best feasible CAL?

• A) 0.64
• B) 0.14
• C) 0.62
• D) 0.33
• E) 0.54

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Definitions:

Natural Resources

Resources that occur naturally in the environment and are utilized for economic gain, such as water, minerals, forests, and fossil fuels.

Land Improvements

Enhancements made to a plot of land to increase its value, which include landscaping, paving, and installing utilities.

Timberlands

Refers to land primarily used for the cultivation and harvesting of timber.

Depletion

An accounting approach used to allocate the cost of extracting natural resources, such as minerals, oil, and gas, over the period those resources are extracted and sold.