Use the table for the question(s)below.
-Based upon the information provided about securities A,B,and C,the risk-free rate of interest is closest to:
A)4%.
B)5%.
C)8%.
D)10%.

Question

Use the table for the question(s)below. 
-Based upon the information provided about securities A,B,and C,the risk-free rate of interest is closest to:
A)4%. 
B)5%. 
C)8%. 
D)10%.

Quizplus · Accepted Answer

In the table, securities A and C have higher expected returns and higher standard deviations, indicating they are riskier. Security B has a lower expected return and a lower standard deviation, indicating it is less risky. Therefore, the risk-free rate of interest would likely be closer to the expected return of security B, which is 5%.

Use the Table for the Question(s)below