Suppose That Ms

Multiple Choice

Suppose that Ms.Lynch can make up her portfolio using a risk-free asset that offers a surefire rate of return of 10% and a risky asset with an expected rate of return of 20%, with standard deviation 5.If she chooses a portfolio with an expected rate of return of 20%, then the standard deviation of her return on this portfolio will be

A) 2.50%.
B) 8%.
C) 5%.
D) 10%.
E) None of the above.