A portfolio has $1,200 invested in a risk-free asset with a 5 percent rate of return,and $3,800 invested in a risky asset with a 15 percent rate of return and a 20% standard deviation.What is the standard deviation of the portfolio?
A) 4.80%
B) 8.75%
C) 15.20%
D) 16.77%

Question

Quizplus · Accepted Answer

Weight in risky asset,= ($3,800)/($3,800 + 1,200)= 0.76
Portfolio standard deviation = 0.20*0.76 = 0.152 F1S1S1W1F1F1F10 15.2%

A Portfolio Has $1,200 Invested in a Risk-Free Asset with a 5