Given an Optimal Risky Portfolio with Expected Return of 12

question 38

Multiple Choice

Given an optimal risky portfolio with expected return of 12% and standard deviation of 23% and a risk free rate of 3%,what is the slope of the best feasible CAL?

• A)0.64
• B)0.39
• C)0.08
• D)0.35
• E)0.36

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Definitions:

Wholesale Price

The cost of goods sold in large quantities to retailers or distributors for the purpose of resale.

Third-Degree Price Discrimination

A pricing strategy where different prices are charged to different groups of consumers based on their willingness to pay.

Marginal Revenue

The additional income generated from the sale of one more unit of a product or service.

Marginal Cost

Marginal cost refers to the increase in total cost that arises when the quantity produced is incremented by one unit.