Answer:
D) 9.0%
Step-by-step explanation:
Calculation to determine what The risk-free portfolio that can be formed with the two securities will earn
Using this formula
Return of the portfolio =Weight of stock A * Return of Stock A + Weight of Stock B * Return of Stock B
Let plug in the formula
Return of the portfolio=( 0.5 * 0.1)+ (0.5 * 0.08)
Return of the portfolio= 0.05 + 0.04
Return of the portfolio= 0.09*100
Return of the portfolio= 9%
Therefore The risk-free portfolio that can be formed with the two securities will earn a(n) 9.0% rate of return.