Laura Has One Risk-Free Asset and One Risky Stock in Her

question 5

Multiple Choice

Laura has one risk-free asset and one risky stock in her portfolio.The risk-free asset has an expected return of 3.2 percent.The risky asset has a beta of 1.3 and an expected return of 14.9 percent.What is the expected return on the portfolio if the portfolio beta is 0.975?

• A) 7.65 percent
• B) 9.83 percent
• C) 10.73 percent
• D) 11.98 percent
• E) 12.37 percent

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Definitions:

Eupnea

Normal, unlabored breathing often associated with a state of rest.

Anxious Patient

A patient experiencing anxiety or nervousness, often requiring special considerations in medical settings.

Pulse

The rhythmic expansion and contraction of an artery as blood is forced through it, typically checked to measure the heart rate.

Respiratory Rate

The number of breaths a person takes per minute, which is an essential vital sign in health assessments.