Investments B and C Both Have the Same Standard Deviation

question 32

Multiple Choice

Investments B and C both have the same standard deviation of 20 percent and have the same correlation to the market portfolio. If the expected return on B is 15 percent and that of C is 18 percent, then the investors would

• A)prefer B to C.
• B)prefer C to B.
• C)reject both B and C.
• D)The answer cannot be determined without knowing investors' risk preferences.

---

Definitions:

Passive

Characterized by a lack of active response or initiative.

Conduct Disorder

A mental health disorder characterized by a repetitive and persistent pattern of behavior that violates the basic rights of others or major age-appropriate social norms or rules.

School Phobia

Fear of attending school, marked by extreme anxiety at leaving parents.

Metamemory Skills

An individual's awareness of their own memory abilities and strategies, involved in monitoring and controlling memory processes.