According to Mr. Santos' calculations, he should invest the same amount in an asset with a risk-free interest rate of 4% and in a stock with an expected return of sixteen percent and a standard deviation of 18 percent. Estimate the expected return on the portfolio. 12% O 9% O 4% O 10%

According to Mr. Santos' calculations, he should invest the same amount in an asset with a risk-free interest rate of 4% and in a stock with an expected return of sixteen percent and a standard deviation of 18 percent. Estimate the expected return on the portfolio. 12% O 9% O 4% O 10%

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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According to Mr. Santos' calculations, he should invest the same amount in an asset with a risk-free interest rate of 4% and in a stock with an
expected return of sixteen percent and a standard deviation of 18 percent.
Estimate the expected return on the portfolio.
12%
9%
4%
10%

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