Portfolio a has expected return of 16 with a standard


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.

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Financial Management: Portfolio a has expected return of 16 with a standard
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