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7. True, False or Uncertain (Justify your answer). I have the opportunity to hold an equally-weighted portfolio of 10,000 investment projects which are uncorrelated with each other, or the economy. The investment projects are extremely volatile. In equilibrium, I should expect to earn approximately the risk-free rate.

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betikuadeniyi

Answer: UNCERTAIN

Explanation:

In determining risk free rates there are certain indices that needs to be defined before getting a value. Current inflation rate have to be known as well as yield of the Treasury bond that matches your investment duration. Risk free rate practically is what you earn after an inflation from risk free investments.

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