Solution-Consider a t-bill with a rate of return

Consider a t-bill with a rate of return

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Reference no: EM132504328

Consider a T-bill with a rate of return of 5% and the following risky securities:

Security A: E(r) = 0.15; Variance = 0.04

Security B: E(r) = 0.10; Variance = 0.0225

Security C: E(r) = 0.12; Variance = 0.01

Security D: E(r) = 0.13; Variance = 0.0625

From which set of portfolios, formed with the T-bill and any one of the four risky securities, would a risk-averse investor always choose his portfolio?

A. The set of portfolios formed with the T-bill and security A.

B. The set of portfolios formed with the T-bill and security B.

C. The set of portfolios formed with the T-bill and security C.

D. The set of portfolios formed with the T-bill and security D.

E. Cannot be determined.

Reference no: EM132504328

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Consider a t-bill with a rate of return

Reference no: EM132504328

Reference no: EM132504328

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