Risky portfolio has an expected return

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A risky portfolio has an expected return of .10 and a standard deviation of .26. The risk-free rate of return is .03.

An investor combines the risky portfolio and the risk-free asset so that the combined portfolio has a standard deviation of .13.

What percent of the investor's combined portfolio is in the risky portfolio?

50%

100%

70%

30%

A risky portfolio has an expected return of .08 and a standard deviation of .15. The risk-free rate of return is .04.

A utility-maximizing investor combines the risky portfolio and the risk-free asset and invests 80% in the risky portfolio (20% in the risk-free asset).

True or False: The risk aversion value ("A") of this investor is less than 3.

True

False

Reference no: EM131835372

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