Suppose That Ms

question 5

Multiple Choice

Suppose that Ms.Lynch in Workouts can make up her portfolio using a risk-free asset that offers a surefire rate of return of 10% and a risky asset with an expected rate of return of 25%, with standard deviation 5.If she chooses a portfolio with an expected rate of return of 25%, then the standard deviation of her return on this portfolio will be

• A)2.50%.
• B)8%.
• C)5%.
• D)10%.
• E)None of the above.

---

Definitions:

Income Statement

A financial statement that summarizes a company's revenues, expenses, and profits or losses over a specific period.

Contribution Format

An income statement format that separates fixed and variable costs to illustrate their impact on net income.

Income Statement

A financial report that shows the revenue, expenses, and profits (or losses) of a company over a specific period of time.

Degree of Operating Leverage

A ratio that quantifies the sensitivity of a company's operating income to its sales volume, indicating the impact of fixed and variable costs.