Consider a T-bill with a rate of return of 6% and the following risky securities: Security A: E(r) = 9%; Standard Deviation = 9% Security B: E(r) = 10%; Standard Deviation = 11% security C: E(r)= 16%; Standard Deviation = 20% Security D: E(r) = 18%; Standard Deviation = 26% From which set of portfolios, formed with the T-bill and any one of the four risky securities, woulda risk-averse investor always choose his portfolio? Select one: A. The set of portfolios formed with the T-bill and security D. B.The set of portfolios formed with the T-bill and security A. oC. The set of portfolios formed with the T-bill and security B. D. The set of portfolios formed with the T-bill and security c. E. Cannot be determined.
Consider a T-bill with a rate of return of 6% and the following risky securities: Security A: E(r) = 9%; Standard Deviation = 9% Security B: E(r) = 10%; Standard Deviation = 11% security C: E(r)= 16%; Standard Deviation = 20% Security D: E(r) = 18%; Standard Deviation = 26% From which set of portfolios, formed with the T-bill and any one of the four risky securities, woulda risk-averse investor always choose his portfolio? Select one: A. The set of portfolios formed with the T-bill and security D. B.The set of portfolios formed with the T-bill and security A. oC. The set of portfolios formed with the T-bill and security B. D. The set of portfolios formed with the T-bill and security c. E. Cannot be determined.
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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Consider a T-bill with a
Security A: E(r) = 9%; Standard Deviation = 9%
Security B: E(r) = 10%; Standard Deviation = 11%
security C: E(r)= 16%; Standard Deviation = 20%
Security D: E(r) = 18%; Standard Deviation = 26%
From which set of portfolios, formed with the T-bill and any one of the four risky securities, woulda risk-averse investor always choose his portfolio?
Select one:
A. The set of portfolios formed with the T-bill
and security D.
B.The set of portfolios formed with the T-bill
and security A.
oC. The set of portfolios formed with the T-bill
and security B.
D. The set of portfolios formed with the T-bill
and security c.
E. Cannot be determined.
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