You Are Comparing the Returns of Two Portfolios for a 10-Year

question 24

Multiple Choice

You are comparing the returns of two portfolios for a 10-year period.Portfolio I has a lower dispersion of returns and a higher average rate of return than Portfolio II.Given this,what do you know with certainty?

• A)Portfolio I has a lower standard deviation than Portfolio II.
• B)Portfolio I is riskier than Portfolio II.
• C)Portfolio II has less total risk than Portfolio I.
• D)Portfolio I will outperform Portfolio II over the next 10 years.
• E)Portfolio II consists of more individual stocks than Portfolio I.

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Definitions:

Non-metal Free Elements

Elements that exist in their natural state not combined with other elements and do not display metallic characteristics; examples include oxygen (O2) and nitrogen (N2).

Redox Reaction

A chemical reaction where the oxidation states of atoms are changed through the transfer of electrons.

Oxidation State

The measure of the degree of oxidation of an atom in a substance, indicating the number of electrons lost or gained by an atom.

Reaction

A chemical process in which substances interact to form new products typically characterized by a change in properties.