Min Has $5,000 to Invest

question 60

Multiple Choice

Min has $5,000 to invest.The expected return on the market portfolio is 11 percent with a standard deviation of 15 percent.What are the expected return and standard deviation for the portfolio if she borrowed $2,000 at the risk-free rate of 4 percent to invest in the market portfolio?

• A) Expected return = 19.40%; standard deviation = 15.40%
• B) Expected return = 15.40%; standard deviation = 19.40%
• C) Expected return = 13.80%; standard deviation = 21.00%
• D) Expected return = 21.00%; standard deviation = 13.80%

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Definitions:

Big Five Trait

Components of a personality theory that outlines five broad dimensions of human personality: openness, conscientiousness, extraversion, agreeableness, and neuroticism.

Traits

Enduring personal qualities or attributes that influence behavior, thoughts, and emotions.

Achievement-Striving

A personality trait characterized by a strong desire to accomplish significant tasks and meet high standards of performance.

Self-Discipline

The ability to control one's feelings and overcome one's weaknesses; the ability to pursue what one thinks is right despite temptations to abandon it.