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Unformatted text preview: B) 50% and 50% C) 60% and 40% D) 40% and 60% E) Cannot be determined. Answer: C Difficulty: Moderate Rationale: 0.08 = x(0.20); x = 40% in risky asset. 35. The slope of the Capital Allocation Line formed with the risky asset and the risk-free asset is equal to A) 0.47 B) 0.80 C) 2.14 D) 0.40 E) Cannot be determined. Answer: D Difficulty: Moderate Rationale: (0.11 - 0.03)/0.20 = 0.40. Use the following to answer questions 36-38: You invest $1000 in a risky asset with an expected rate of return of 0.17 and a standard deviation of 0.40 and a T-bill with a rate of return of 0.04. 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