Exam 5: Risk and Return: Past and Prologue

You invest $1,000 in a complete portfolio. The complete portfolio is composed of a risky asset with an expected rate of return of 16% and a standard deviation of 20% and a treasury bill with a rate of return of 6%. -You have $500,000 available to invest.The risk-free rate as well as your borrowing rate is 8%.The return on the risky portfolio is 16%.If you wish to earn a 22% return,you should _________.

Treasury bills are paying a 4% rate of return.A risk averse investor with a risk aversion of A = 3 should invest in a risky portfolio with a standard deviation of 24% only if the risky portfolio's expected return is at least ______.

If you are promised a nominal return of 12% on a one year investment,and you expect the rate of inflation to be 3%,what real rate do you expect to earn?