Asset a Has an Expected Return of 20% and a Standard

question 22

Multiple Choice

Asset A has an expected return of 20% and a standard deviation of 25%. The risk-free rate is 10%. What is the reward-to-variability ratio?

• A) .40
• B) .50
• C) .75
• D) .80

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Definitions:

Dangerous Object

An item that through its inherent characteristics, use, or misuse, can reasonably be foreseen to cause injury or harm.

Motor Vehicle

A self-propelled vehicle used for transporting passengers or goods on a road.

Peroxide

A compound containing two oxygen atoms bonded together in its molecule or as the anion O2^2-. Commonly used as a bleaching agent and antiseptic.

Break Off

To discontinue or end abruptly a relationship, negotiation, or engagement of some sort.