You Have Been Hired as a Portfolio Manager for a Stock

question 3

Multiple Choice

You have been hired as a portfolio manager for a stock brokerage.Your first job is to invest $100,000 in a portfolio of two assets.The first asset is a safe asset with a sure return of 4% interest.The second asset is a risky asset with a 26% expected rate of return, but the standard deviation of this return is 10%.Your client wants a portfolio with as high a rate of return as possible consistent with a standard deviation no larger than 4%.How much of her money do you invest in the safe asset?

• A)$22,000
• B)$40,000
• C)$64,000
• D)$36,000
• E)$60,000

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Definitions:

Aftercare

Support or care provided after initial treatment of a condition, aimed at maintaining recovery and preventing relapse.

Community

A group of people living in the same place or having a particular characteristic in common, often sharing resources and responsibilities.

Antipsychotic Medication

Drugs designed to treat psychotic symptoms, such as delusions, hallucinations, or disordered thinking, often used in schizophrenia and bipolar disorder.

Placebo

An inert or non-therapeutic substance given to a control group in clinical trials to compare the effects against those of the actual drug.