Unformatted text preview: asset, respectively, to form a portfolio with a standard deviation of 0.20? A) 30% and 70% B) 50% and 50% C) 60% and 40% D) 40% and 60% E) Cannot be determined. Answer: B Difficulty: Moderate Rationale: 0.20 = x(0.40); x = 50% in risky asset. 38. The slope of the Capital Allocation Line formed with the risky asset and the risk-free asset is equal to A) 0.325. B) 0.675. C) 0.912. D) 0.407. E) Cannot be determined. Answer: A Difficulty: Moderate Rationale: (0.17 - 0.04)/0.40 = 0.325. Bodie, Investments, Sixth Edition...
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This note was uploaded on 01/31/2010 for the course ECON 3660DE taught by Professor Patrickmartinandvitalialexeev during the Spring '10 term at University of Guelph.
- Spring '10