Which of the following is generally used to represent the risk-free rate of return?

A) The rate on an FDIC-insured savings account

B) The rate on a 3-year certificate of deposit

C) The rate on the 3-month U.S. Treasury bill

D) The expected return on the S&P 500 Index

The point of tangency between the efficient frontier and an investor's utility indifference curve shows:

A) the portfolio with the highest return

B) the portfolio with the minimum variance

C) the most desirable portfolio for the particular investor

D) the risk-free rate

The "equity risk premium" (or "market price of risk") is the difference between returns on common stocks and the return on:

A) Treasury Bills

B) Gold

C) Silver

D) Real Estate

Your investment management client that he "wishes to obtain a 12% return with little or no risk."

A) The client should be invested in U.S. Treasury Bills

B) The client should be invested in Long-Term Government Bonds

C) The client should be invested in Small Capitalization Stocks

D) The client should be told that a 12% return and little or no risk are incompatible objectives