A Margin User Has a Situation Where the Riskfree Rate

question 25

Multiple Choice

A margin user has a situation where the riskfree rate is 5% and the risky portfolio has an expected return of 18% with standard deviation of 12%. If the proportion in the riskfree asset is -.5, the resulting expected return, standard deviation is

• A) 27%, 12%.
• B) 24.5%, 18%.
• C) 27%, 15%.
• D) 24.5%, 12%

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