A Portfolio Consists of One Risky Asset and One Risk-Free

question 46

Multiple Choice

A portfolio consists of one risky asset and one risk-free asset. The risky asset has an expected return of 13.2% and a beta of 1.32. The risk-free asset has an expected return of 1.5%. How much of the portfolio is invested in the risk-free asset if the portfolio beta is 1.02?

• A)16%
• B)23%
• C)32%
• D)45%
• E)54%

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Definitions:

Reproductive Potential

The maximum capacity of an organism to reproduce under optimal environmental conditions.

Economic

Pertaining to the production, consumption, and transfer of wealth within a society or geographical area.

Maleness-femaleness

The continuum of attributes that distinguish between the characteristics traditionally associated with males and females.

Gender-typed Products

Gender-typed products are items that are specifically marketed or designed for use by individuals of a particular gender, based on societal norms or stereotypes.