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:

Polymorphism

A programming concept allowing objects of different classes to be treated as objects of a common superclass, enabling methods to act differently based on the actual class of the object they are acting upon.

Retesting

The process of testing software again to confirm that fixes for defects are working and have not introduced new defects.

Parent Class

In object-oriented programming, a class from which another class (the child class) inherits properties and methods.

Derived Class

In object-oriented programming, a class that inherits properties and behaviors from one or more base classes.