1. Portfolio A has an expected return of 16% with a standard deviation of 8%. Portfolio B has an expected return of 12% with a standard deviation of 7%.
(a) Portfolio A has a lower risk/return.
(b) Portfolio B has a larger expected terminal wealth.
(c) The portfolios have the same risk/return.
(d) Portfolio B has a more certain return.
(e) Portfolio B has a lower risk/return.
2. The percentage of the premium that the buyer of a call option is allowed to borrow through margin is
a. 50. b. 0. c. 33. d. 80.