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Assume You Own a Portfolio That Is Invested 50 Percent

Question 84

Multiple Choice

Assume you own a portfolio that is invested 50 percent in large-company stocks and 50 percent in corporate bonds. If you want to increase the potential annual return on this portfolio, you could:


A) decrease the investment in stocks and increase the investment in bonds.
B) replace the corporate bonds with intermediate-term government bonds.
C) replace the corporate bonds with Treasury bills.
D) increase the standard deviation of the portfolio.
E) reduce the expected volatility of the portfolio.

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