An Investor Develops a Portfolio with 25% in a Riskfree

question 46

Multiple Choice

An investor develops a portfolio with 25% in a riskfree asset with a return of 6% and the rest in a risky asset with expected return of 9% and standard deviation of 6%. The standard deviation for the portfolio is

• A) 20.3%.
• B) 4.5%.
• C) 0%.
• D) 27%.

Understand the basic assumptions underlying financial accounting, such as the going concern assumption.

Identify and understand the elements of financial statements (assets, liabilities, equity, revenue, and expenses).

Comprehend the rationale behind using historical cost for asset valuation in financial statements.

Recognize the conditions under which the going concern assumption may not be appropriate.