If the Proportion Invested in the Riskfree Asset Is -

question 29

Multiple Choice

If the proportion invested in the riskfree asset is -.4, the proportion invested in the risky portfolio is

• A) -1.4.
• B) .6.
• C) 0.
• D) 1.4.

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Definitions:

Rate of Return

Change in an investment's value within a predetermined interval, indicated as a percent of the investment's initial cost.

Annual Dividend

The total amount of dividend payments made to shareholders over the course of a year, often used as an indicator of a company's financial health.

Rate of Return

The accrual or depletion in value of an investment across a chosen period, quantified as a percentage of the investment’s initial expense.

Constant Dividend

A policy in which a firm aims to pay out a fixed dividend amount to shareholders regularly.