A complete portfolio is composed of a risky portfolio with an expected rate of return of 14% and a standard deviation of 20% and Treasury bills with a rate of return of 5%. The complete portfolio has a standard deviation of 12%. What proportion of the complete portfolio is invested in the risky portfolio?
40%
60%
100%
12%
An investment has a 10% probability of earning a 20% rate of return, a 60% probability of earning a 10% rate of return, and a 30% probability of losing 5%. What is the expected rate of return for this investment?
8.3%
–7.0%
9.5%
6.5%
A risky portfolio has an expected rate of return of 15% and a standard deviation of 20%. The Treasury bill rate is 4%. What is the reward-to-volatility ratio for the portfolio?
0.75
0.55
0.95
0.80