What Are the Expected Return and Standard Deviation for a Portfolio

question 20

Multiple Choice

What are the expected return and standard deviation for a portfolio that has $2,000 invested in a risk-free asset with 5.25% rate of return, and $8,000 invested in a risky asset with a 21% rate of return and a 35% standard deviation?

• A)Expected return = 17.85%; standard deviation = 28.00%
• B)Expected return = 28.00%; standard deviation = 17.85%
• C)Expected return = 7.00%; standard deviation = 8.40%
• D)Expected return = 8.40%; standard deviation = 7.00%

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