Risky Asset A B E(r) σ (std dev) PA.B 0.30 9% 5% 20% 10% *Rate on Treasure bills (risk-free rate of return) is 2% Given your client's risk assessment survey, you feel a portfolio with moderate risk would be most appropriate. Therefore, you decide to recommend a portfolio with a standard deviation equal to 20%. Given the three financial assets above (A, B, and the risk-free asset), what's the best possible expected return you can generate for your client given this level of risk? Multiple Choice 10.11% О 6.60% о 10.61% 9.17%
Risky Asset A B E(r) σ (std dev) PA.B 0.30 9% 5% 20% 10% *Rate on Treasure bills (risk-free rate of return) is 2% Given your client's risk assessment survey, you feel a portfolio with moderate risk would be most appropriate. Therefore, you decide to recommend a portfolio with a standard deviation equal to 20%. Given the three financial assets above (A, B, and the risk-free asset), what's the best possible expected return you can generate for your client given this level of risk? Multiple Choice 10.11% О 6.60% о 10.61% 9.17%
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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Baghiben
Transcribed Image Text:Risky Asset
A
B
E(r)
σ (std dev)
PA.B
0.30
9%
5%
20%
10%
*Rate on Treasure bills (risk-free rate of return) is 2%
Given your client's risk assessment survey, you feel a portfolio with moderate risk would be most appropriate. Therefore, you decide to recommend a portfolio with a standard deviation equal to 20%. Given the three financial assets above (A,
B, and the risk-free asset), what's the best possible expected return you can generate for your client given this level of risk?
Multiple Choice
10.11%
О
6.60%
о
10.61%
9.17%
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