Multiple Choice
Suppose Sarah can borrow and lend at the risk free-rate of 3%.Which of the following four risky portfolios should she hold in combination with a position in the risk-free asset?
A) portfolio with a standard deviation of 15% and an expected return of 12%
B) portfolio with a standard deviation of 19% and an expected return of 15%
C) portfolio with a standard deviation of 25% and an expected return of 18%
D) portfolio with a standard deviation of 12% and an expected return of 9%
Correct Answer:
Verified
Correct Answer:
Verified
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