Two Assets Have the Following Expected Returns and Standard Deviations

question 10

Multiple Choice

Two assets have the following expected returns and standard deviations when the risk-free rate is 5%: An investor with a risk aversion of A = 3 would find that ________ on a risk-return basis.

• A)only Asset A is acceptable
• B)only Asset B is acceptable
• C)neither Asset A nor Asset B is acceptable
• D)both Asset A and Asset B are acceptable

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Definitions:

American Federation of Labor

An early national federation of labor unions in the United States, founded in 1886, that focused on skilled workers.

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