Suppose That Ms

question 6

Multiple Choice

Suppose that Ms.Lynch can make up her portfolio using a risk-free asset that offers a surefire rate of return of 10% and a risky asset with an expected rate of return of 20%, with standard deviation 5.If she chooses a portfolio with an expected rate of return of 17.50%, then the standard deviation of her return on this portfolio will be

• A)3.75%.
• B)7.50%.
• C)6.75%.
• D)1.88%.
• E)None of the above.

---

Definitions:

Breakfast Cereals

Manufactured food products made from processed grains that are often eaten as the first meal of the day.

Recession

A short-term downturn in the economy characterized by decreased trade and industrial production, typically marked by a decline in gross domestic product (GDP) for two consecutive quarters.

Employment

Employment refers to the condition of having paid work or the relationship between an employer and an employee who performs work or services for compensation.

Income Decrease

Income Decrease refers to a reduction in the amount of money received by an individual or entity, often affecting purchasing power and economic stability.