The Expected Return of the Market Portfolio Is 14 Percent

question 91

Multiple Choice

The expected return of the market portfolio is 14 percent with a standard deviation of 25 percent.The risk-free rate is 6 percent.What would be the weight of the market portfolio in an efficient portfolio with a standard deviation of 30 percent,if borrowing is not allowed?

• A) 16.78%
• B) 83.33%
• C) 20%
• D) Cannot be constructed

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Definitions:

Evolution

The change in the genetic composition of a population over successive generations, often leading to the development of new species.

Gene Pool

All the alleles of all the genes present in a freely interbreeding population.

Populations

A group of individuals of the same species living and interacting in a particular geographic area.

Mutations

Alterations in the DNA sequence that can lead to changes in the structure and function of proteins produced by genes.