The Risk-Free Portfolio That Can Be Formed with the Two

question 55

Multiple Choice

The risk-free portfolio that can be formed with the two securities will earn _____ rate of return.

• A)9.5%
• B)11.4%
• C)10.9%
• D)9.9%
• E)none of the above

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Definitions:

Free Trade

An economic policy that allows imports and exports to occur without governmental tariffs, quotas, or other restrictions, promoting international trade.

Foreign Investment

Capital investment made by individuals or entities based in one country into the businesses or assets of another country.

Write Off The Debt

is a financial action where a creditor cancels or forgives the debt owed by a debtor, often due to the inability of the debtor to pay back.