Suppose You Invest Equal Amounts in a Portfolio with an Expected

Multiple Choice

Suppose you invest equal amounts in a portfolio with an expected return of 16 percent and a standard deviation of returns of 18 percent and a risk-free asset with an interest rate of 4 percent.
Calculate the standard deviation of the returns on the resulting portfolio.

A) 8 percent
B) 10 percent
C) 20 percent
D) 9 percent