Exhibit 7-5
USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S)

Multiple Choice

Exhibit 7-5
USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S) $\begin{array}{ccc}\text { Portiolio } & \text { Expected Return } & \text { Standard Deviation } \\\hline \text { A } & 9.8 \% & 14.0 \% \\\text { B } & 6.7 \% & 9.8 \% \\\text { C } & 11.2\%& 18.5\%\end{array}$
-Refer to Exhibit 7-5. Calculate the risk premium per unit of risk for the three portfolios above assuming the risk-free rate is 4.0%. $$\begin{array} { c c c c } \text { Partiolin: } & \mathbf { A } & \mathbf { B } & \mathbf { C } \\\hline \text { I. } & 0.068 & 0.027 & 0.072 \\\text { II. } & 0.414 & 0.276 & 0.389 \\\text { III. } & 0.700 & 0.680 & 0.605 \\\text { IV } & 0.300 & 0.280 & 0.205 \\\text { V. } & 0.650 & 0.580 & 0.480\end{array}$$

A) I
B) II
C) III
D) IV
E) V