The Expected Return on the Market Is 14 Percent with a Standard

question 84

Multiple Choice

The expected return on the market is 14 percent with a standard deviation of 18 percent and the risk-free rate is 5 percent.Which of the following portfolios are underpriced?

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

---

Definitions:

Indefinite Period

A duration of time without a specified end, often creating uncertainty in contracts or agreements.

Statute of Frauds

Legal regulation stipulating that certain contracts must be written and signed to be legally enforceable, including agreements related to real estate, marriage, and debts.

Writing Requirement

The writing requirement refers to a legal principle that certain agreements or contracts must be in written form and signed by the parties involved to be legally enforceable.

Statute of Frauds

A legal principle requiring certain contracts to be in writing and signed by the party to be charged, to be enforceable.