The Returns for Two Assets,A and B,are 5% and 8 $3.25 \%$

question 29

Multiple Choice

The returns for two assets,A and B,are 5% and 8% respectively.If an investor holds 25% of her wealth in asset A,what is the continuously compounded return of a value-weighted portfolio comprising assets A and B?

• A) \(3.25 \%\)
• B) \(6.25 \%\)
• C) \(6.75 \%\)
• D)\(7.25 \%\)

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Definitions:

Sigma

A symbol used in statistics to represent the standard deviation of a population or summing operations.

Sample Size

Refers to the number of individuals or observations included in a sample, which represents a subset of the larger population.

N

Represents the sample size or the number of observations in a dataset.

Σ Symbol

A mathematical notation that represents the sum of a set of terms, known as the summation symbol.