A Risk-Free Asset Is Available at 5% Interest

question 1

Multiple Choice

A risk-free asset is available at 5% interest.Another asset is available with a mean rate of return of 15% but with a standard deviation of 5%.An investor is considering an investment portfolio consisting of some of each stock.On a graph with standard deviation on the horizontal axis and mean on the vertical axis, the budget line that expresses the alternative combinations of mean return and standard deviation possible with portfolios of these assets is a straight line with

• A)slope 2.
• B)slope -3.
• C)increasing slope as you move left.
• D)slope -1.
• E)slope -1/3.

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Industrially Advanced Country

A country that has a highly developed economy and advanced technological infrastructure relative to other less industrialized nations.

Per Capita Income

The average income earned per person in a specific area or country, calculated by dividing the area's total income by its total population.

Income Growth

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