You Invest $100 in a Risky Asset with an Expected

Multiple Choice

You invest $100 in a risky asset with an expected rate of return of 0.11 and a standard deviation of 0.21 and a T-bill with a rate of return of 0.045.
-A portfolio that has an expected outcome of $114 is formed by

A) Investing $100 in the risky asset.
B) Investing $80 in the risky asset and $20 in the risk-free asset.
C) Borrowing $46 at the risk-free rate and investing the total amount ($146) in the risky asset.
D) Investing $43 in the risky asset and $57 in the riskless asset.
E) Such a portfolio cannot be formed.