If You Want to Form a Portfolio with an Expected

question 65

Multiple Choice

If you want to form a portfolio with an expected rate of return of 0.11,what percentages of your money must you invest in the T-bill and P,respectively?

• A)0.25; 0.75
• B)0.19; 0.81
• C)0.65; 0.35
• D)0.50; 0.50
• E)cannot be determined

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Definitions:

Personal Income Tax

A tax levied on individuals or entities based on their income or profit earned.

Taxable Income

The portion of an individual's or corporation's income upon which taxes are assessed, after allowances for deductions and exemptions.

Total Tax

The combined amount of all taxes imposed by different levels of government on individuals or businesses.

Average Tax Rate

The ratio of the total amount of taxes paid to the total tax base (taxable income or spending), expressed as a percentage.