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and to the 19. Subtracting risky assets will generally move the efficient frontier A up, right B.down, right C.up, left D.down, left 20. Financial assets Financial assets means by which individuals hold claims on real assets. directly to the productive capacity of the economy. A) are, contribute B) are, do not contribute C) are not contribute D) are not, do not contribute 21. You invest in a mutual fund that charges a 3% front end load. The fund also charges 0.5% 126-1 charges (fees) and 1.0% operating expenses every year, and has a fixed 1.0% back end load on Class A shares. What will be the value of your investment of $20,000 in their Class A shares, if you invest for 2 years and the fund generates an expected interest of 7%, before all expenses? A. $21,377 B. $21,303 C. $20,000 D. $21,428 22. A portfolio is composed of two stocks, A and B. Stock A has a standard deviation of return of 5% while stock B has a standard deviation of return of 15%. The correlation coefficient between the returns on A and B is.5. Stock A comprises 40% of the portfolio while stock B comprises 60% of the portfolio. The variance of return on the portfolio is A. .0035 B. .0103 C. .0085 D. .0094 23. An investor invests 40% of his wealth in a risky asset with an expected rate of return of 15% and a standard deviation of 20% and 60% in a treasury bill that pays 6%. Her portfolio's expected rate of return and standard deviation are and respectively A. 8.0%, 12% B. 9.6%, 8% C. 9.6%, 10% D. 11.4%, 12%

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