You invest $100 in a risky asset with an expected rate of return of 15% and a standard deviation of 15% and a T-bill with a rate of return of 5% (and a standard deviation of 0).

6. What percentages of your money must be invested in the risky asset and the risk-free asset, respectively, to form a portfolio with an expected return of 13%?

A)20% and 80%

B)25% and 75%

C) 80% and 20%

D)75% and 25%

7. What percentages of your money must be invested in the risk-free asset and the risky asset, respectively, to form a portfolio with a standard deviation of 8%?

A)67% and 33%

B)53% and 47%

C)27% and 73%

D)47% and 53%

8. A portfolio that has an expected return of 23% is formed by

A)borrowing $40 at the risk-free rate and investing the total amount ($140) in the risky asset.

B)borrowing $80 at the risk-free rate and investing the total amount ($180) in the risky asset.

C)borrowing $60 at the risk-free rate and investing the total amount ($160) in the risky asset.

D)borrowing $85 at the risk-free rate and investing the total amount ($185) in the risky asset.

9. The slope of the CAL formed with the risky asset and the risk-free asset is equal to

A) 0.5667.

B) 0.6667.

C) 0.7667

D) 0.4667.