Determine Which One of These Three Portfolios Dominates Another

question 13

Multiple Choice

Determine which one of these three portfolios dominates another. Name the dominated portfolio and the portfolio that dominates it. Portfolio Blue has an expected return of 13 percent and risk of 17 percent. The expected return and risk of portfolio Yellow are 15 percent and 19 percent; and for the Purple portfolio are 12 percent and 18 percent.

• A) Portfolio Blue dominates portfolio Yellow.
• B) Portfolio Blue dominates portfolio Purple.
• C) Portfolio Purple dominates portfolio Blue.
• D) Portfolio Purple dominates portfolio Yellow.

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Definitions:

Relatively Large Amounts

Describes financial figures or transactions that are significant in size compared to others within the same context.

Sarbanes-Oxley

A U.S. federal law enacted to protect investors by improving the accuracy and reliability of corporate disclosures, made in the wake of financial scandals.

Publicly Held Companies

Corporations whose shares are publicly traded on stock exchanges and available for purchase by the general public.

Petty Cash

A small amount of cash on hand used for covering minor expenses.