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Suppose you invest equal amounts in a portfolio with an expected return of 16 percent and a standard deviation of returns of 18 percent and

Suppose you invest equal amounts in a portfolio with an expected return of 16 percent and a standard deviation of returns of 18 percent and a risk-free asset with an interest rate of 4 percent. Calculate the standard deviation of the returns on the resulting portfolio.

a. 8 percent

b. 10 percent

c. 20 percent

d. 9 percent

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