You Invest $100 in a Risky Asset with an Expected

question 44

Multiple Choice

You invest $100 in a risky asset with an expected rate of return of 0.11 and a standard deviation of 0.20 and a T-bill with a rate of return of 0.03.
What percentages of your money must be invested in the risky asset and the risk-free asset, respectively, to
Form a portfolio with an expected return of 0.08?

• A) 85% and 15%
• B) 75% and 25%
• C) 62.5% and 37.5%
• D) 57% and 43%
• E) Cannot be determined.

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Definitions:

Overt-Destructive

Behavior that is openly aggressive or harmful, typically observable and measurable by others.

Covert Destructive

Behaviors or actions that are hidden or secretive in nature but result in harm or damage either to oneself or others.

Conduct Disorder

A range of antisocial types of behavior displayed in childhood or adolescence.

Conduct Disorder

A mental disorder diagnosed in childhood or adolescence characterized by a persistent pattern of behavior that violates the rights of others or societal norms.