Treasury Notes Are Paying a 4% Rate of Return

question 21

Multiple Choice

Treasury notes are paying a 4% rate of return. A risk averse investor with a risk aversion of A = 3 should invest in a risky portfolio with a standard deviation of 24% only if the risky portfolio's expected return is at least ________.

• A)8.67%
• B)9.84%
• C)12.64%
• D)14.68%

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