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Suppose You Have $2,000 to Invest

Question 41

Multiple Choice

Suppose you have $2,000 to invest.The market portfolio has an expected return of 10.5 percent and a standard deviation of 16 percent.The risk-free rate is 3.75 percent.How much should you invest in the risk-free asset if you wish to have a 15 percent return on the portfolio?


A) $667
B) -$667
C) $1,333
D) -$1,333

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