A risky portfolio has an expected return of .10 and a standard deviation of .26. The risk-free rate of return is .03.
An investor combines the risky portfolio and the risk-free asset so that the combined portfolio has a standard deviation of .13.
What percent of the investor's combined portfolio is in the risky portfolio?
50%
100%
70%
30%
A risky portfolio has an expected return of .08 and a standard deviation of .15. The risk-free rate of return is .04.
A utility-maximizing investor combines the risky portfolio and the risk-free asset and invests 80% in the risky portfolio (20% in the risk-free asset).
True or False: The risk aversion value ("A") of this investor is less than 3.
True
False