The expected return on the market is 15% with a standard deviation of 12.5% and the risk-free rate is 5%. Which of the following portfolios are correctly priced? Portfolio Expected Return 1 2 3 4 O 1 and 4 only O 3 and 4 only O 1 and 3 only O 2 and 3 only 30.00% 25.00% 10.00% 9.00% Standard Deviation 28.75% 25.00% 6.25% 5.50%

The expected return on the market is 15% with a standard deviation of 12.5% and the risk-free rate is 5%. Which of the following portfolios are correctly priced? Portfolio Expected Return 1 2 3 4 O 1 and 4 only O 3 and 4 only O 1 and 3 only O 2 and 3 only 30.00% 25.00% 10.00% 9.00% Standard Deviation 28.75% 25.00% 6.25% 5.50%

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter8: Analysis Of Risk And Return

Section: Chapter Questions

Problem 13P

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