If Two Investments, X and Y, Have the Same Expected

question 39

Multiple Choice

If two investments, X and Y, have the same expected return an individual investor would prefer:

• A)the one with a higher standard deviation.
• B)the one with a higher mean.
• C)the one with a lower correlation coefficient.
• D)the one with a lower variance.

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Definitions:

Metacognition

The awareness and understanding of one's own thought processes, or thinking about thinking.

Working Memory

A cognitive system with a limited capacity that is responsible for temporarily holding information available for processing.

Long-Term Memory

The phase of memory responsible for storing information over extended periods, from days to decades.

Wechsler Adult Intelligence Scale

A standardized test designed to measure the intelligence of adults and older adolescents, encompassing various types of cognitive abilities.