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Suppose that an investor has $100,000 to invest. The investor has chosen to construct a portfolio containing 25% of a risk-free treasury bill (5% rate
Suppose that an investor has $100,000 to invest. The investor has chosen to construct a portfolio containing 25% of a risk-free treasury bill (5% rate of return) and 75% of risky assets. The risky portion of the complete portfolio is composed of 50% stock (10% expected rate of return and 25% standard deviation) and 50% bond (6% rate of return and 12% standard deviation) with zero covariance. What is the expected rate of return and standard deviation of the complete portfolio.
A)7,25%, 10,40%
B)7,50%, 10,60%
C)7,25%, 10,00%
D)7,75%, 10,40%
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