An Investor Can Design a Risky Portfolio Based on Two

question 48

Multiple Choice

An investor can design a risky portfolio based on two shares, A and B. Share A has an expected return of 18% and a standard deviation of return of 20%. Share B has an expected return of 14% and a standard deviation of return of 5%. The correlation coefficient between the returns of A and B is 0.50. The risk-free rate of return is 10%. The proportion of the optimal risky portfolio that should be invested in Share A is ________.

• A)0%
• B)40%
• C)60%
• D)100%

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Definitions:

Self-Esteem

A person's overall subjective emotional evaluation of their own worth; it is a judgment of oneself as well as an attitude toward the self.

Less Helpful

Refers to a reduced tendency to assist others, which may be influenced by factors like the presence of bystanders or personal inconvenience.

Proximity

The physical or psychological closeness between people, objects, or ideas, which can influence social relations and interactions.

Physical Nearness

The spatial proximity of one object or person to another, which can influence social interactions and relationships.