1. You manage an equity fund with an expected risk premium of 14% and a standard deviation of 54%. The rate on Treasury bills is 6.8%. Your client chooses to invest $120,000 of her portfolio in your equity fund and $30,000 in a T-bill money market fund. What is the expected return and standard deviation of return on your client’s portfolio?
2. A very high gross profit margin can result from: 1. a very high product price; 2. a very low tax rate; 3. a very low cost of goods sold; 4. a very high total asset turnover.
a. 1 only
b. 2 only
c. 3 only
d. 4 only
e. 1 and 3 only
f. 2 and 4 only
g. 1 and 4 only