An Investor Wishes to Construct a Portfolio Consisting of a 70

question 18

Multiple Choice

An investor wishes to construct a portfolio consisting of a 70% allocation to a stock index and a 30% allocation to a risk free asset.The return on the risk-free asset is 4.5% and the expected return on the stock index is 12%.The standard deviation of returns on the stock index is 6%.Calculate the expected standard deviation of the portfolio.

• A) 4.20%
• B) 25.20%
• C) 3.29%
• D) 10.80%
• E) 5.02%

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Definitions:

Rorschach Inkblot Test

A psychological test in which a person's interpretations of inkblots are analyzed to assess personality traits and emotional functioning.

Lacking Validity

Refers to the extent to which a concept, conclusion or measurement fails to accurately reflect the real world.

Thematic Apperception Test

A projective psychological test that involves creating stories about ambiguous images, used to explore a person's emotions, attitudes, and internal conflicts.

Implicit Motives

Unconscious desires, aspirations, or needs that influence one's behaviors and attitudes.