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:

Xylem

A type of vascular tissue in plants that transports water and dissolved minerals from the roots to the rest of the plant.

Alpha-Galacturonic Acid

A component of pectin, a polysaccharide found in the cell walls of plants, involved in maintaining cell structure and rigidity.

Glucagon

A hormone produced by the pancreas that promotes the increase of blood glucose levels by stimulating glycogen breakdown in the liver.

Pectin

A complex carbohydrate found in the cell walls of plants that is often used as a gelling agent in foods and for its dietary fiber properties.