Asset 1 Has an Expected Return of 10% and a Standard

question 182

Multiple Choice

Asset 1 has an expected return of 10% and a standard deviation of 20%.Asset 2 has an expected return of 15% and a standard deviation of 30%.The correlation between the two assets is 1.0.Portfolios of these two assets will have an expected return ________.

• A)between 0% and 15%
• B)between 10% and 15%
• C)below 10%
• D)above 15%

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Definitions:

Korsakoff's Syndrome

A chronic memory disorder caused by severe deficiency of thiamine (vitamin B1), most often associated with prolonged alcoholism.

Confabulation

The creation of altered, false, or misrepresented recollections about one's own life or the world, without the deliberate aim to mislead.

Alzheimer's Disease

A degenerative brain disorder characterized by memory loss, cognitive decline, and personality changes.

Anterograde Amnesia

The loss of the ability to create new memories after the event that caused the amnesia.