An investor has a two asset portfolio, each with a 50% weight. The first has an expected return of 8% and an expecied standard deviation of 30%. The sacond asset has an expected return of 6% and an expected standard deviation of 10%. The two assets have a correlation of 0.7. What is the 6.3% 7% 6% 8% QUESTION 25 The market risk premium is the expected retum of the market minus the risk free rate. Which of tho below is most likely to cause the market nisk premium to incriase? Federal Reserve loosening A decline in the value of the trade weighted dollar A decrease in expecied inflation An increase in risk aversion