Consider a Risky Portfolio, A, with an Expected Rate of Return

question 69

Multiple Choice

Consider a risky portfolio, A, with an expected rate of return of 0.15 and a standard deviation of 0.15, that lies on a given indifference curve.Which one of the following portfolios might lie on the same indifference curve

• A)E(r) = 0.15; Standard deviation = 0.20
• B)E(r) = 0.15; Standard deviation = 0.10
• C)E(r) = 0.10; Standard deviation = 0.10
• D)E(r) = 0.20; Standard deviation = 0.15
• E)E(r) = 0.10; Standard deviation = 0.20

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Definitions:

Functional Currency

The currency of the primary economic environment in which the entity operates, typically used in measuring and reporting its financial results.

Remeasure

The process of adjusting the value of a financial instrument or asset to reflect its current market value.

Financial Statements

Structured reports that detail the financial activities and condition of a business, including the balance sheet, income statement, and statement of cash flows.

Current Rate Method

A method used in financial reporting to convert the financial statements of a foreign subsidiary to the parent company's reporting currency, using the current exchange rates.