Treasury Bills Are Paying a 4% Rate of Return

question 82

Multiple Choice

Treasury bills are paying a 4% rate of return.A risk averse investor with a risk aversion of A = 3 should invest in a risky portfolio with a standard deviation of 24% only if the risky portfolio's expected return is at least ______.

• A) 8.67%
• B) 9.84%
• C) 12.64%
• D) 14.68%

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Definitions:

Charles Darwin

A British naturalist best known for his contributions to the science of evolution and the theory of natural selection.

Evolution

The method through which various types of living beings are believed to have evolved and varied from ancient predecessors throughout Earth's history.

Behavior Genetics

A discipline focused on analyzing how genetics and environmental factors impact behaviors.

Genetic Influences

Factors determined by genes inherited from parents that affect various aspects of an individual’s physical traits, behaviors, and susceptibility to certain diseases.