You Invest $100 in a Risky Asset with an Expected

question 30

Multiple Choice

You invest $100 in a risky asset with an expected rate of return of 0.11 and a standard deviation of 0.21 and a T-bill with a rate of return of 0.045.
What percentages of your money must be invested in the risk-free asset and the risky asset, respectively, to
Form a portfolio with a standard deviation of 0.08?

• A) 30.1% and 69.9%
• B) 50.5% and 49.50%
• C) 60.0% and 40.0%
• D) 61.9% and 38.1%
• E) Cannot be determined.

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Definitions:

Skill Variety

The degree to which a job requires a range of different activities and skills, contributing to employee satisfaction and motivation.

Job Sharing

Splits one job between two people.

Autonomous Group Scheduling

A work arrangement where teams set their own schedules and deadlines without direct oversight.

Skill Variety

The degree to which a job requires a range of different activities and skills, influencing worker engagement and satisfaction.