In the Mean-Standard Deviation Graph,which One of the Following Statements

question 24

Multiple Choice

In the mean-standard deviation graph,which one of the following statements is true regarding the indifference curve of a risk-averse investor?

• A) It is the locus of portfolios that have the same expected rates of return and different standard deviations.
• B) It is the locus of portfolios that have the same standard deviations and different rates of return.
• C) It is the locus of portfolios that offer the same utility according to returns and standard deviations.
• D) It connects portfolios that offer increasing utilities according to returns and standard deviations.
• E) none of these.

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Definitions:

Stop-Payment Order

a request made to a bank by an account holder not to pay a check that has been issued but not yet cashed.

Loss

A decrease in value, resources, or money typically as a result of a business transaction, investment, or unforeseen events.

Postdated

Pertaining to a check or other document that bears a date later than the actual date it was written, to be cashed or deposited at that later date.

Liable

Legally responsible or obligated, as in being held accountable for an action or in relation to a debt or infringement.