【正文】 est rate fluctuations and the inflation uncertainty over their time to maturity is negligible.E.their term to maturity is identical to most investors39。their shortterm nature makes their values insensitive to interest rate fluctuations.B.s utility line.the indifference curve.D.the security market line.B.the decision as to the allocation between a riskfree asset and a risky asset and considerable security analysis.considerable security analysis.D.the decision as to the allocation between a riskfree asset and a risky asset.B.investors will hold varying amounts of the risky asset and varying amounts of the riskfree asset in their portfolios.all investors will have the same portfolio asset allocations.C.A.44.Based on their relative degrees of risk toleranceestimating security betas.D.assessing risk tolerance.B.increase in the portfolio proportion of the riskfree asset.an investor39。rewardtovolatility ratio increasing.B.None of the optionsanalyzing returns on variable rate bonds.D.measuring the standard deviation of returns.B. $378$108。 $54。 $378D.$568。 $378。Cannot be determinedB.Cannot be determined$240。$100。$360。$240。Cannot be determined 。 D.。 。 B.。Cannot be determined。Cannot be determinedThe set of portfolios formed with the Tbill and security C.D.The set of portfolios formed with the Tbill and security A.B. Variance = Security D: E(r) = 。 Variance = Security B: E(r) = 。Cannot be determined.D..B.Such a portfolio cannot be formed.borrowing $43 at the riskfree rate and investing the total amount ($143) in the risky asset.D.investing $100 in the risky asset.B.Cannot be determined60% and 40%D.30% and 70%B.Cannot be determined67% and 33%D.85% and 15%B. D. C. B.A.s expected return and standard deviation are __________ and __________, respectively.None of the options。30.An investor invests 40% of his wealth in a risky asset with an expected rate of return of and a variance of and 60% in a Tbill that pays %. His portfolio39。29.An investor invests 30% of his wealth in a risky asset with an expected rate of return of and a variance of and 70% in a Tbill that pays 6%. His portfolio39。 E. D. C. B.A.s expected return and standard deviation are __________ and __________, respectively.None of the optionsminimizes both her risk and return.D.maximizes her expected profit.B.27.Given the capital allocation line, an investor39。The slope of the CAL is also called the rewardtovolatility ratio.D.The CAL shows riskreturn binations.B.line on which lie all portfolios with the same expected rate of return and different standard deviations.investment opportunity set formed with two risky assets.C.A.25.The capital allocation line can be described as theI and IIE.I and IIIC.A.s will be upward sloping.s indifference curves will not intersect.V) Steve39。s indifference curves will have steeper slopes than Edie39。s indifference curves will have flatter slopes than Edie39。s indifference curves, which of the following is true? Assume that the graph shows expected return on the vertical axis and standard deviation on the horizontal axis.I) Steve and Edie39。Investment C dominates investment A.Investment D dominates all of the other investments.D.Investment B dominates investment A.B.represented by the scaling factor in the utility function.the minimum rate guaranteed by institutions such as banks.D.the rate that a riskfree investment would need to offer with certainty to be considered equally attractive as the risky portfolio.B.will increase as the rate of return increases.will decrease as the variance decreases.D.will decrease as the rate of return increases.B.terminal wealth will be less than initial wealth.the standard deviation of the payoff is larger than its expected value.D.investors will lose money.B.will not be undertaken by a riskaverse investor and is a riskless investment.is a riskless investment.D.will not be undertaken by a riskaverse investor.B.should be considered in the context of the effect on overall portfolio volatility and should be bined with the riskiness of other individual assets in the proportions these assets constitute the entire portfolio.should be considered in the context of the effect on overall portfolio volatility.C.A.18.The riskiness of individual assetsalthough not known with perfect certainty, do allow the advisor to create more suitable portfolios for the client.D.cannot be known with perfect certainty.B.minimum required utility of the portfolio.s aversion to risk.C.s return requirement.B.A.U = E(r) (A/2)s2,where A = .The variable (A) in the utility function represents the16.4E.2C.A.U = E(r) (A/2)s2,where A = .Which investment would you select if you were risk neutral?15.4E.2C.A.U = E(r) (A/2)s2,where A = .Based on the utility function above, which investment would you select?14.E(r) = 。E(r) = 。E(r) = 。E(r) = 。E(r) = 。None of these options dominates the other alternatives.E(r) = 。E(r) = 。E(r) = 。E(r) = 。86C.A.11.A portfolio has an expected rate of return of and a standard deviation of . The riskfree rate is 6%. An investor has the following utility function: U = E(r) (A/2)s2. Which value of A makes this investor indifferent between the r