If the Expected Return to a Risky Portfolio Is 12

Multiple Choice

If the expected return to a risky portfolio is 12% with standard deviation 10%, and if the return to the riskless asset is 7%, then the expected return and Volatility for a portfolio consisting of 1/2) riskless bonds and 1/2) the risky portfolio would be:

A) 7% return, 10% Volatility
B) 9.5% return, 5% Volatility
C) 9.5% return, 10% Volatility
D) 10% return, 10% Volatility
E) Cannot be computed with the information given.