Portfolio a Has Expected Return of 10% and Standard Deviation

question 47

Multiple Choice

Portfolio A has expected return of 10% and standard deviation of 19%.Portfolio B has expected return of 12% and standard deviation of 17%.Rational investors will

• A)borrow at the risk-free rate and buy A.
• B)sell A short and buy B.
• C)sell B short and buy A.
• D)borrow at the risk-free rate and buy B.
• E)lend at the risk-free rate and buy B.

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Definitions:

Zoophilia

A sexual interest characterized by an attraction to animals other than humans.

Sexual Pleasure

The physical and/or emotional satisfaction derived from sexual activities or thoughts.

Animals

Multicellular, eukaryotic organisms in the kingdom Animalia or Metazoa, characterized by their ability to move voluntarily and consume organic material.

Exhibitionism

A paraphilia characterized by the recurrent urge or behavior to expose one's genitals to an unsuspecting person for sexual pleasure.