Greg Has $10,000 to Invest in a Risk-Free Asset and in the Market

question 30

Multiple Choice

Greg has $10,000 to invest in a risk-free asset and in the market portfolio.The risk-free rate is 4.8%.The market portfolio has an expected return of 13.6% with a standard deviation of 15%.What are the expected return and standard deviation for a portfolio with 30% of the funds invested in the risk-free asset?

• A)Expected return = 10.50%; standard deviation = 10.96%
• B)Expected return = 10.96%; standard deviation = 10.50%
• C)Expected return = 4.50%; standard deviation = 7.44%
• D)Expected return = 7.44%; standard deviation = 4.50%

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