An Investor Wishes to Construct a Portfolio Consisting of a 70

question 67

Multiple Choice

An investor wishes to construct a portfolio consisting of a 70% allocation to a stock index and a 30% allocation to a risk free asset.The return on the risk-free asset is 4.5% and the expected return on the stock index is 12%.Calculate the expected return on the portfolio.

• A) 8.25%
• B) 16.50%
• C) 17.50%
• D) 9.75%
• E) 14.38%

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Definitions:

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Precipitation in the form of liquid water drops that have diameters greater than 0.5 millimeters.