The following table shows risk and return measures for two portfolios. Portfolio Average Annual Rate of Return Standard Deviation Beta R 11% 10% 0.5 S&P 500 14% 12% 1.0 When plotting portfolio R on...

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The following table shows risk and return measures for two portfolios.

Portfolio	Average Annual Rate of Return	Standard Deviation	Beta
R	11%	10%	0.5
S&P 500	14%	12%	1.0

When plotting portfolio R on the preceding table relative to the SML, portfolio

R lies:

a. On the SML.

b. Below the SML.

c. Above the SML.

d. Insufficient data given.

When plotting portfolio R relative to the capital market line, portfolio R lies:

a. On the CML.

b. Below the CML.

c. Above the CML.

d. Insufficient data given.

Answered Same Day Dec 24, 2021

Solution

David answered on Dec 24 2021

124 Votes

1)
2)

SOLUTION.PDF