Question

For a potential investment of $5,000, a portfolio has an EMV of $1,000 and a standard deviation of $100. What is the rate of return?

Answer 1

The value is
`R = 20\%`

Explanation:

From the question we are told that

The potential investment is
`i = \$ 5000`

The EMV of the portfolio is
`EMV = \$ 1000`

The standard deviation is
`\sigma = \$ 100`

Generally the rate of return is mathematically represented as

`R = (EMV)/(i) * 100`

=>
`R = (1000)/(5000) * 100`

=>
`R = 20\%`