Assume That Portfolio X Has a 15% Return and 40

question 30

Multiple Choice

Assume that portfolio X has a 15% return and 40% standard deviation. Market portfolio has a 10% return and 10% standard deviation. A 3-month T-bill has the annual average return of 5%. What is the M² measure?

• A) -2.5%
• B) 3.5%
• C) -0.5%
• D) 8.0%
• E) 6.0%

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Definitions:

Retirement Savings

Funds accumulated for retirement, often involving tax advantages, through vehicles such as 401(k) plans, IRAs, or annuities.

AGI

Adjusted Gross Income, an individual's total gross income minus specific deductions, used in the United States tax system to determine taxable income.

Dependent Daughters

This term is not an official tax term but generally refers to daughters who qualify as dependents on someone's tax return due to financial support and other IRS criteria.

AGI

Adjusted Gross Income, which is gross income minus allowable deductions, used to determine taxable income on an individual's federal income tax return.