If an Investor's Portfolio Is Allocated 75% to the Market

question 98

Multiple Choice

If an investor's portfolio is allocated 75% to the market portfolio and 25% to Treasury bills,then the investor should expect to receive:

• A) the risk-free rate plus 75% of the expected return on the market.
• B) the risk-free rate plus 75% of the expected market risk premium.
• C) 75% of the expected return on the market.
• D) 25% of the risk-free rate plus 75% of the expected market risk premium.