Suppose You Have $5,000 to Invest in a Risk-Free Asset

question 74

Multiple Choice

Suppose you have $5,000 to invest in a risk-free asset and the market portfolio.The expected return on the market portfolio is 13.5% with a standard deviation of 18%.The risk-free rate is 4.25%.How much of your funds should be in the risk-free asset if the portfolio has an expected return of 10%?

• A)$1,892
• B)$2,091
• C)$2,909
• D)$3,108

Explore the disclosure requirements for NCI in consolidated financial statements.

Examine how NCI interacts with profits, retained earnings, and interstate group activities.

Understand the calculation of non-controlling interest (NCI) and its components.

Calculate goodwill using the proportionate interest method.

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Definitions:

Consumption

The act of using goods and services by households, which is a primary component in measuring gross domestic product (GDP) in economics.

Consumer's Surplus

The disparity between what consumers are prepared and can afford to spend on a product or service and the actual amount they end up paying.

Total Amount

The complete sum or quantity of something, encompassing all parts or units counted.

Willing to Pay

The maximum amount an individual is prepared to spend to acquire a good or service.