8.Risk tolerance can be influenced by which of the following characteristics? (a)job status (b)age (c)wealth (d)all of the above Answer:(d) 9.The is defined as a security that offers a perfectly predictable rate of return in terms of the unit of account and the length of the investor's decision horizon. (a)riskless asset (b)risky asset (c)30-day bond (d)30-day debenture Answer:(a) 10.A portfolio contains one risky asset and one riskless asset.The expected rate of return on the risky asset is 0.13 and the riskless rate is 0.05.The standard deviation of the risky asset is 0.2,and the standard deviation of the portfolio is 0.075.What is the expected rate of return on the portfolio using the trade-off line? (a0.0490 (b)0.0800 (c)0.0980 (d0.1175 Answer:(b) 11.An investor has a $100,000 investment to allocate between a risky asset and a riskless asset.The equation for the trade-off line is determined to be E(r)=0.05 +0.09w.If the investor is requiring a portfolio composition corresponding to an expected rate of return of 0.11,how much should be invested in the risky asset? (a)$18,181 (b)$33,333 (c)$66,667 (d$81,819 Answer:(c) 12-312-3 8. Risk tolerance can be influenced by which of the following characteristics? (a) job status (b) age (c) wealth (d) all of the above Answer: (d) 9. The ________ is defined as a security that offers a perfectly predictable rate of return in terms of the unit of account and the length of the investor's decision horizon. (a) riskless asset (b) risky asset (c) 30-day bond (d) 30-day debenture Answer: (a) 10. A portfolio contains one risky asset and one riskless asset. The expected rate of return on the risky asset is 0.13 and the riskless rate is 0.05. The standard deviation of the risky asset is 0.2, and the standard deviation of the portfolio is 0.075. What is the expected rate of return on the portfolio using the trade-off line? (a) 0.0490 (b) 0.0800 (c) 0.0980 (d) 0.1175 Answer: (b) 11. An investor has a $100,000 investment to allocate between a risky asset and a riskless asset. The equation for the trade-off line is determined to be E(r) = 0.05 + 0.09w. If the investor is requiring a portfolio composition corresponding to an expected rate of return of 0.11, how much should be invested in the risky asset? (a) $18,181 (b) $33,333 (c) $66,667 (d) $81,819 Answer: (c)