You Invest $100 in a Risky Asset with an Expected

question 49

Multiple Choice

You invest $100 in a risky asset with an expected rate of return of 0.11 and a standard deviation of 0.21 and a T-bill with a rate of return of 0.045. What percentages of your money must be invested in the risk-free asset and the risky asset, respectively, to form a portfolio with a standard deviation of 0.08?

• A) 30.1% and 69.9%
• B) 50.5% and 49.50%
• C) 60.0% and 40.0%
• D) 61.9% and 38.1%
• E) Cannot be determined.

---

Definitions:

For Loop

A looping structure that enables the execution of code multiple times, depending on a specific Boolean condition.

Sequential Search

A linear search method that checks each element in a list one at a time until the desired element is found or the list ends.

Binary Search

Binary search is a fast method used to locate an element in a sorted array by continuously halving the range of search.

Sorted Lists

Structured collections of elements arranged in a specific order, often numerical or lexicographical.