Using the Formula for the Capital Market Line (Formula 21-5),if $\sigma$

question 30

Multiple Choice

Using the formula for the capital market line (Formula 21-5) ,if the risk-free rate (R_F) is 6%,the market rate of return (K_M) is 12%,the market standard deviation ( $\sigma$ _M) is 11%,and the standard deviation of the portfolio ( $\sigma$ _P) is 14%,compute the anticipated return of the portfolio (K_P) .

• A)20.4%
• B)16.33%
• C)13.64%
• D)13.4%
• E)13.2%

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