The Expected Return on the Market Is 12 Percent with a Standard

question 80

Multiple Choice

The expected return on the market is 12 percent with a standard deviation of 15 percent and the risk-free rate is 4.5 percent.Which of the following portfolios are overvalued?

• A) 1 and 2 only
• B) 1 and 4 only
• C) 2 and 3 only
• D) 3 and 4 only

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Definitions:

Extinction

The permanent loss of all members of a species from the earth, leading to a decrease in biodiversity.

Century

A period of one hundred years.

Estimated

An approximation or educated guess based on available information or data, often used when exact numbers are unavailable.

Living Organisms

Entities that display the characteristics of life, including the ability to grow, reproduce, respond to stimuli, and often, to move.