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asset, risky as shown below. For example, 20% in risk-free and 80% in A, or 30% in risk-free and 70% in B, or 40% in ris Free and 60% in C, and so on. Risky Asset E(r) Stdev A B C 20% 25% 30% 35% 40% 45% The risk-free rate is 5%. If investors target an expected annual return of 30%, what is the lowest stdev the can be achieved among all the possible allocations? Show your answer in % and round to two decimals (e.g. xx.xx%).

asset, risky as shown below. For example, 20% in risk-free and 80% in A, or 30% in risk-free and 70% in B, or 40% in ris Free and 60% in C, and so on. Risky Asset E(r) Stdev A B C 20% 25% 30% 35% 40% 45% The risk-free rate is 5%. If investors target an expected annual return of 30%, what is the lowest stdev the can be achieved among all the possible allocations? Show your answer in % and round to two decimals (e.g. xx.xx%).

Essentials Of Investments
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
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Investors can allocate their wealth between (i) the risk-free asset, and (ii) one of the three risky assets as shown below. For example, 20% in risk-free and 80% in A, or 30% in risk-free and 70% in B, or 40% in risk- free and 60% in C, and so on. Risky Asset E(r) A B Stdev 20% 25% 30% 35% 40% 45% The risk-free rate is 5%. If investors target an expected annual return of 30%, what is the lowest stdev that can be achieved among all the possible allocations? Show your answer in % and round to two decimals (e.g. xx.xx%).
Transcribed Image Text:Investors can allocate their wealth between (i) the risk-free asset, and (ii) one of the three risky assets as shown below. For example, 20% in risk-free and 80% in A, or 30% in risk-free and 70% in B, or 40% in risk- free and 60% in C, and so on. Risky Asset E(r) A B Stdev 20% 25% 30% 35% 40% 45% The risk-free rate is 5%. If investors target an expected annual return of 30%, what is the lowest stdev that can be achieved among all the possible allocations? Show your answer in % and round to two decimals (e.g. xx.xx%).
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