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An Investor Wishes to Earn a Portfolio with a Standard 20% 20 \%

Question 26

Multiple Choice

An investor wishes to earn a portfolio with a standard deviation of 5%,by placing funds in the risk-free and risky asset portfolios.If the risky asset portfolio has a standard deviation and return of 10% and 5% respectively,calculate the weight that needs to be invested in the risky asset to achieve a standard deviation of 5%.


A) 20% 20 \%
B) 40% 40 \%
C) 50% 50 \%
D) 75% 75 \%

Correct Answer:

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