Allison's Portfolio Has an Expected Return of 14% and a Standard

question 29

Multiple Choice

Allison's portfolio has an expected return of 14% and a standard deviation of of 20%. Brianna's portfolio has an expected rate of return of 11% and a standard deviation of 12%. The risk- free rate is 3%. According to the Sharpe measure,

• A) Brianna has the better portfolio.
• B) The answer depends on Allison and Brianna's risk tolerance.
• C) Allison has the better portfolio.
• D) The portfolio's are equally desirable.

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Definitions:

Total Costs

The sum of all costs incurred in the production of goods or provision of services, including both fixed and variable costs.

Profit-Maximizing Price

The price level at which a company can sell its products or services to achieve the highest profit, considering the cost of production and market demand.

Pure Monopolist

A market structure where a single firm is the sole producer of a product or service, having significant control over its price.

Economic Profit

The difference in total funds acquired and total expenditures, both straightforward and oblique, for a corporation.