Asset 1 returns are riskier than asset 2 returns

Assignment Help Finance Basics

Reference no: EM13909494

Base your answer on the following data:

Returns on asset 1	Returns on asset 1
5%	3%
8%	5%
3%	5%
5%	3%
3%	8%
5%	5%

A. Asset 1 returns are riskier than asset 2 returns.

True False

B. In this case any reduction in risk realized by diversifying across the two assets comes at a cost of lowing expected return.

True False

C. A portfolio constructed by investing 50% of your capital in asset 1 and 50% in asset 2 will have 10% of the risk of a portfolio composed of either 100% of capital invested in either asset 1 or asset 2. True False

Reference no: EM13909494

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