An Investor Can Design a Risky Portfolio Based on Two

question 18

Multiple Choice

An investor can design a risky portfolio based on two shares, A and B. The standard deviation of return on Share A is 24% while the standard deviation on Share B is 14%. The correlation coefficient between the return on A and B is 0.35. The expected return on Share A is 25% while on Share B it is 11%. The proportion of the minimum variance portfolio that would be invested in Share B is approximately ________.

• A)45%
• B)67%
• C)85%
• D)92%

---

Definitions:

Unskilled

Lacking specialized skill, training, or proficiency in a particular area or job.

Problem-Centered Orientation

A mindset where individuals focus on solving problems and coping with situations in a proactive and practical manner.

Traditional Students

Typically refers to students who pursue higher education immediately after completing high school and are usually full-time and dependent learners.

Readiness To Learn

A state or condition in which an individual is motivated and prepared to acquire new knowledge or skills, influenced by cognitive, emotional, and environmental factors.