An Investor Can Design a Risky Portfolio Based on Two

question 50

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 20% while the standard deviation on Share B is 15%. The expected return on Share A is 20% while on Share B it is 10%. The correlation coefficient between the return on A and B is 0%. The expected return on the minimum variance portfolio is approximately ________.

• A)10.00%
• B)13.60%
• C)15.00%
• D)19.41%

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Definitions:

SCOR Model

Supply Chain Operations Reference model; a diagnostic tool for supply chain management, covering all business processes and measuring total supply chain performance.

ROA Improvement

Strategies or actions taken to increase the Return On Assets, which measures how efficiently a company uses its assets to generate earnings.

Channel Structure Management

The process of designing, organizing, and monitoring the distribution channels of a company to efficiently move goods or services from producers to end-users.

Supply Chain Process

The series of steps involved in producing and distributing goods or services, from raw material acquisition to delivery to the end user.