You Invest $1,000 in a Complete Portfolio

question 68

Multiple Choice

You invest $1,000 in a complete portfolio. The complete portfolio is composed of a risky asset with an expected rate of return of 16% and a standard deviation of 20% and a treasury bill with a rate of return of 6%.
-__________ of your complete portfolio should be invested in the risky portfolio if you want your complete portfolio to have a standard deviation of 9%.

• A) 100%
• B) 90%
• C) 45%
• D) 10%

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Definitions:

Split Brains

A condition resulting from surgery that severs the corpus callosum, leading to disconnection between the two hemispheres of the brain.

Visual Cortex

The part of the cerebral cortex that processes visual information, located in the occipital lobe of the brain.

Plasticity

The brain’s ability to change, especially during childhood, by reorganizing after damage or by building new pathways based on experience.

Braille

A tactile writing system used by people who are blind or visually impaired, involving patterns of raised dots that represent letters, numbers, and punctuation marks.