QUESTION 9

You invest $1,000 in a complete portfolio. The complete portfolio is composed of a risky asset with an expected rate of return of 10% and a standard deviation of 20% and a Treasury bill with a rate of return of 6%. The slope of the capital allocation line formed with the risky asset and the risk-free asset is approximately _________.

		6.52
		0.8
		0.5
		0.2

QUESTION 10

Your investment has a 40% chance of earning a 10% rate of return, a 50% chance of earning a 6% rate of return, and a 10% chance of losing 5%. What is the standard deviation of this investment?

		5.14%
		4.27%
		7.29%
		2.43%

QUESTION 11

Your complete portfolio is worth a total of $1000 and can be formed out of 2 assets: a risk free asset and a risky portfolio that has a volatility of 12%. If you want your complete portfolio to have a volatility greater than 12%, you must________

		invest $1000 in the risk free asset
		Invest more than $1000 in the risky portfolio
		invest $500 in the risk-free asset
		Invest $1000 in the risky portfolio

QUESTION 12

Your complete portfolio is worth a total of $1000 and can be formed out of 2 assets: a risk free asset that has a rate of return of 5% and a risky portfolio with an expected return of 8%. If you want your complete portfolio to have an expected rate of return equal to 5%, you must:

		Invest $1000 in the risk free asset
		Invest $500 in the risk free asset
		Invest $1000 in the risky portfolio
		nvest more than $1000 in the risky portfolio