What Return Would Be Expected by an Investor Whose Portfolio

question 83

Multiple Choice

What return would be expected by an investor whose portfolio was 25% market portfolio and 75% Treasury bills if the risk-free rate was 7% and the market risk premium was 8%?

• A)8.00%
• B)9.00%
• C)10.75%
• D)13.00% Expected return on market = r_f + market risk premium
• = 7% + 8%
• = 15%
• R_f = (.25 x .07) + (.75 x 15)
• = 1)75 + 11.25

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Definitions:

Hedgehog Concept

A strategic framework suggesting that success is achieved by focusing deeply on the intersection of personal passion, what one can be the best at, and what drives the economic engine.

Competition

The rivalry among businesses or entities to attract customers, increase sales, and achieve a dominant position in the market.

Knowledge Management

The process of capturing, distributing, and effectively using organizational knowledge to enhance performance, innovation, and competitive advantage.

Knowledge Dissemination

The process of spreading and sharing knowledge within an organization or to the broader public.