When two risky securities that are slightly positively correlated but not perfectly correlated are held in a portfolio, i.e. a 18) positive 1.o A) the portfolio standard deviation will be equal to the weighted average of the B) the portfolio standard deviation will be less than the weighted average of the C) than the weighted average of the individual security standard deviations. individual security standard deviations the portfolio standard deviation will be greater individual security standard deviations. D) the portfolio standard deviation will be greater than the weighted average of the individual security standard deviations and will always be equal to the sccuriti covariance. 19) Based on their relative degrees of risk tolerance: A) investors will hold varying amounts of the risky asset and the risk-free asset in their portfolios. B) investors will hold varying amounts of the C) investors will hold varying amounts of the risky asset in their portfolios D) all investors will have the same portfolio asset allocations. risk-free asset in their portfolios. Suppose that you live on an island where you have available to you only two assets. asset that yields 7%return and a risky asset that yields an aver deviation of 30%. [Use this information to answer the next 2 questions.] free age return of 18% with a standard A risk o, what will be the return on a portfolio consisting of a 75% investment in the risk free asset and the rest in the risky asset? A) 18.00% B) 9.00% C) 12.50% D) 9.75% 21. Standard Deviation on a portfolio consisting of a 75% investment in the risk free asset and the rest in the risky asset will be A) 25.0% B) 7.5% C) 22.50% D) 27.35