Expected return and standard deviation of a portfolio:?

Question

An investor has a portfolio with 60% in a riskfree asset with a return of 5% and the rest in a risky asset with an expected return of 12% and a standard deviation of 10%. Respectively, the expected return and standard deviation of the portfolio are

a. 7.8%, 6%.

b. 9.2%, 6%.

c. 7.8%, 4%.

d. 9.2%, 4%.

Answer 1

Since you only have one risky asset, the answer is the simple weighted average of the risk-free and  risky asset:

c 7.8%, 4%