Y8 KEELVII.Consider a risk-free asset with a return of 4% and a risky asset with an expected return of 12%and volatility of 16%. A portfolio mixing the two assets has expected return 10%. What is theweight on the risky asset in this portfolio?50%75%85%100%Question 4Consider a risk-free asset with a return of 4% and a risky asset with an expected return of 12%and volatility of 16%. As in the previous question, consider a portfolio mixing the two assetshas expected return 10%. What is the volatility of this portfolio?Hint: use your answer from the previous question.10%12%16%

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Consider a risk-free asset with a return of 4% and a risky asset with an expected return of 12% and volatility of 16%. A portfolio mixing the two assets has expected return 10%. What is the weight on the risky asset in this portfolio? 50% 75% 85% 100%

Consider a risk-free asset with a return of 4% and a risky asset with an expected return of 12% and volatility of 16%. A portfolio mixing the two assets has expected return 10%. What is the weight on the risky asset in this portfolio? 50% 75% 85% 100%

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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Question

KEELVII.
Consider a risk-free asset with a return of 4% and a risky asset with an expected return of 12%
and volatility of 16%. A portfolio mixing the two assets has expected return 10%. What is the
weight on the risky asset in this portfolio?
50%
75%
85%
100%
Question 4
Consider a risk-free asset with a return of 4% and a risky asset with an expected return of 12%
and volatility of 16%. As in the previous question, consider a portfolio mixing the two assets
has expected return 10%. What is the volatility of this portfolio?
Hint: use your answer from the previous question.
10%
12%
16%

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