Consider These Two Investment Strategies Strategy __________ Is the Dominant Strategy Because __________

question 26

Multiple Choice

Consider these two investment strategies: $\begin{array}{cc}& \text { Strategy1\%} &\text { Strategy2\%} \\ \text { Expected return } &6&9\\ \text { Standard deviation } &0&4\\ \text {Highest return } &6&15\\ \text { Lowest return } &6&6\\\end{array}$
Strategy __________ is the dominant strategy because __________.

• A) 1; it is riskless
• B) 1; it has the highest reward/risk ratio
• C) 2; its return is greater than or equal to the return of Strategy 1
• D) 2; it has the highest reward/risk ratio
• E) Both strategies are equally preferred.

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Definitions:

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A psychological term referring to individuals who believe they can control their own destiny and outcomes through their actions.

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