You Invest $100 in a Risky Asset with an Expected

question 48

Multiple Choice

You invest $100 in a risky asset with an expected rate of return of 0.12 and a standard deviation of 0.15 and a T-bill with a rate of return of 0.05. A portfolio that has an expected outcome of $115 is formed by

• A) investing $100 in the risky asset.
• B) investing $80 in the risky asset and $20 in the risk-free asset.
• C) borrowing $43 at the risk-free rate and investing the total amount ($143) in the risky asset.
• D) investing $43 in the risky asset and $57 in the riskless asset.
• E) Such a portfolio cannot be formed.

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Definitions:

Mother-Blaming

The societal tendency to fault mothers for their children's problems or behaviors, based on expectations of maternal responsibility.

Pollution

The introduction of contaminants into the natural environment that cause adverse change, negatively impacting air, water, and soil quality.

Motherhood Mystique

An idealized and often unrealistic view of motherhood that suggests maternal instincts are innate and that true fulfillment for women is found in motherhood.

Myths

Traditional stories, often involving supernatural beings or phenomena, that serve to explain natural or social phenomena.