A Portfolio Has a Standard Deviation of 14

question 14

Multiple Choice

A portfolio has a standard deviation of 14.1 percent, a beta of 1.45 and a Treynor ratio of .094. The risk-free rate is 3.2 percent. What is the portfolio's expected rate of return?

• A) 16.83 percent
• B) 17.25 percent
• C) 17.77 percent
• D) 18.41 percent
• E) 18.56 percent

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Definitions:

1933 Act

Officially known as the Securities Act of 1933, it's a U.S. law enacted to ensure transparency in financial statements so investors can make informed decisions about securities.

1934 Act

The Securities Exchange Act of 1934, a U.S. federal law that regulates the secondary trading of securities (stocks, bonds, and debentures) in the United States, established to increase transparency and reduce fraud.

1934 Act

Refers to the Securities Exchange Act of 1934, which regulates the trading of securities such as stocks and bonds in the U.S. and established the Securities and Exchange Commission.

Issuer

An entity that develops, registers, and sells securities to finance its operations, which can be corporations, governments, or municipal bodies.