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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