An Investor Can Design a Risky Portfolio Based on Two

question 65

Multiple Choice

An investor can design a risky portfolio based on two stocks, A and B. Stock A has an expected return of 18% and a standard deviation of return of 20%. Stock B has an expected return of 14% and a standard deviation of return of 5%. The correlation coefficient between the returns of A and B is .50. The risk-free rate of return is 10%. The standard deviation of return on the optimal risky portfolio is ________.

• A) 0%
• B) 5%
• C) 7%
• D) 20%

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Definitions:

Motion

A formal request made to a court or judge for an order or ruling in favor of the requester.

Redirect Examination

A questioning phase in a trial where the party that first examined the witness can question them again after cross-examination to clarify or rebut evidence.

Cross-examination

The questioning of a witness by the opposing party during a trial, aimed at challenging the witness's testimony and credibility.

Redirect Examination

A stage in a trial where the party who initially examined a witness questions them again, typically after cross-examination.