Suppose That Fenner Smith of Workouts Must Divide His

question 10

Multiple Choice

Suppose that Fenner Smith of Workouts must divide his portfolio between two assets, one of which gives him an expected rate of return of 10% with zero standard deviation and one of which gives him an expected rate of return of 25% and has a standard deviation of 5%.He can alter the expected rate of return and the variance of his portfolio by changing the proportions in which he holds the two assets.If we draw a "budget line" with expected return on the vertical axis and standard deviation on the horizontal axis, depicting the combinations that Smith can obtain, the slope of this budget line is

• A)1.50.
• B)-1.50.
• C)-3.
• D)3.
• E)4.50.

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Definitions:

Integumentary

Pertaining to the skin and its appendages, functioning in protection, sensation, and regulation.

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A substance, material, or exposure that physically causes cancer, typically through direct physical damage to DNA.

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Tobacco products that are not burned but used in other forms such as chewing tobacco or snuff, posing health risks such as cancer and dental disease.