Use the following information for the next 4 questions. Suppose a simple model of the stock market. There are n identical risky assets. More precisely, let's assume that the percentage return on the asset i, which we denote by Ri, can be described as follows: Ri=r+F+Xi where r is a constant, F is a random variable with E(F) = 0 and Var(F)=0?. {X;}-, are i.i.d. random variables from a uniform(-0, 0] that are independent of F. Finally, let's define Rpn as the return on the equally-weighted portfolio. E(Rp.) = 5 Var(Rp.) = 82 SDX,)= 1 Question 7.16. What is r? A. -5 B. -2.5 C. 2.5 D. 5 Question 7.17. What is SD(F)? A. 3 B. 9 C. 27 D. 81 Question 7.18. Suppose, we can increase the number of risky assets in a portfolio from n to 2n. What is Var(X2n)? A. 0.25 B. 0.50 C. 0.75 D. 1.00 Question 7.19. Let's define a new portfolio P2n with 2n risky assets that places equal weight on the first n risky assets and also places equal weight on the remaining n assets. What is Var(3Rp2n)? A. 729 B. 734 C. 739 D. 744 Use the following information for the next 4 questions. Suppose a simple model of the stock market. There are n identical risky assets. More precisely, let's assume that the percentage return on the asset i, which we denote by Ri, can be described as follows: Ri=r+F+Xi where r is a constant, F is a random variable with E(F) = 0 and Var(F)=0?. {X;}-, are i.i.d. random variables from a uniform(-0, 0] that are independent of F. Finally, let's define Rpn as the return on the equally-weighted portfolio. E(Rp.) = 5 Var(Rp.) = 82 SDX,)= 1 Question 7.16. What is r? A. -5 B. -2.5 C. 2.5 D. 5 Question 7.17. What is SD(F)? A. 3 B. 9 C. 27 D. 81 Question 7.18. Suppose, we can increase the number of risky assets in a portfolio from n to 2n. What is Var(X2n)? A. 0.25 B. 0.50 C. 0.75 D. 1.00 Question 7.19. Let's define a new portfolio P2n with 2n risky assets that places equal weight on the first n risky assets and also places equal weight on the remaining n assets. What is Var(3Rp2n)? A. 729 B. 734 C. 739 D. 744