You Invest $1000 in a Complete Portfolio

question 27

Multiple Choice

You invest $1000 in a complete portfolio. The complete portfolio is composed of a risky asset with an expected rate of return of 16% and a standard deviation of 20% and a Treasury bond with a rate of return of 6%. You should invest ________ of your complete portfolio in the risky portfolio if you want your complete portfolio to have a standard deviation of 9%.

• A)100%
• B)90%
• C)45%
• D)10%