Your Client, Bo Regard, Holds a Complete Portfolio That Consists

question 10

Multiple Choice

Your client, Bo Regard, holds a complete portfolio that consists of a portfolio of risky assets (P) and T-Bills. The information below refers to these assets. $$\begin{array} { l l } \mathrm { E } \left( \mathrm { R } _ { \mathrm { p } } \right) & 12.00 \% \\\text { Standard Deviation of P } & 7.20 \% \\\text { T-Bill rate } & 3.60 \% \\& \\\text { Proportion of Complete Portfolio in P } & 80 \% \\\text { Proportion of Complete Portfolio in T-Bills } & 20 \% \\& \\\text { Composition of P: } & \\\text { Stock A } & 40.00 \% \\\text { Stock B } & 25.00 \% \\\text { Stock C } & 35.00 \% \\\hline\text { Total } & \underline { 100.00 \% } \\\hline\end{array}$$
-What is the expected return on Bo's complete portfolio?

• A)10.32%
• B)5.28%
• C)9.62%
• D)8.44%
• E)7.58%

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Definitions:

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Lateral Inhibition

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The part of the cerebral cortex that processes visual information.

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Structures located in the inner ear that are critical for maintaining balance and spatial orientation by detecting rotational movements.