You Want to Create a $65,000 Portfolio Comprised of Two

question 99

Multiple Choice

You want to create a $65,000 portfolio comprised of two stocks plus a risk-free security. Stock A has an expected return of 14.2 percent and stock B has an expected return of 17.8 percent. You want to own $20,000 of stockB. The risk-free rate is 4.8 percent and the expected return on the market is 13.1 percent. If you want the portfolio to have an expected return equal to that of the market, how much should you invest in the risk-free security?

• A) $11,921
• B) $13,509
• C) $15,265
• D) $17,314
• E) $18,775

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Definitions:

Jane Goodall

Jane Goodall is a renowned British primatologist and anthropologist, best known for her extensive study of wild chimpanzees in Gombe Stream National Park, Tanzania, contributing significantly to our understanding of primate behavior.

Canine Teeth

Sharp, pointed teeth in the mouths of mammals, including humans, used for tearing food.

Language Skills

pertain to the abilities involved in communication through spoken, written, or signed languages, including listening, speaking, reading, and writing.

Communicative Ability

The capacity to convey information, thoughts, and feelings through various forms of language, symbols, or actions effectively.