The risk-free rate is 5.25%.The expected return on the market is 12% with a standard deviation of 18%.What is the standard deviation of an efficient portfolio with a 16% expected return?
A)7.33%
B)10.12%
C)19.11%
D)28.67%

Question

Quizplus · Accepted Answer

The standard deviation of an efficient portfolio can be calculated using the Capital Market Line (CML) formula. The formula is: σp = (Rp - Rf) / (Rm - Rf) * σm. Plugging in the values: σp = (16% - 5.25%) / (12% - 5.25%) * 18% = 28.67%.

The Risk-Free Rate Is 5