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Question-1: You are considering a $50,000 portfolio containing assets B, M, Q, and D. The following...

Question-1:

You are considering a $50,000 portfolio containing assets B, M, Q, and D. The following table shows the expected annual rate of returns and standard deviations of assets B, M, Q, and D. The last column on the table shows your proposed investment amount in each asset.

  • What is the expected annual rate of return of this Portfolio?
  • Which asset is relatively most risky?

Asset

Expected Return

Standard Deviation

Investment

B

10%

5%

$5,000

M

16%

10%

$10,000

Q

14%

9%

$15,000

D

12%

8%

$20,000

YOU MUST SHOW YOUR WORK WITH APPROPRIATE LABELS
YOU MUST ALSO SHOW CALCULATOR ENTRIES WHEN APPLICABLE.

FINAL ANSWER

Expected Annual Rate of Return

The asset with the Highest Relative Risk
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