Portfolio a Has Expected Return of 10% and Standard Deviation

question 56

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:

Renin Levels

The concentration of renin, an enzyme secreted by the kidneys that plays a key role in the body's regulation of blood pressure.

Acidosis

A pathological condition where there is an excess of acid in the body fluids, marked by an abnormally low blood pH.

Bicarbonate Reabsorption

The process by which the kidneys reclaim bicarbonate ions from the urinary filtrate, helping to maintain blood pH balance and electrolyte concentration.

Body Fluids

Liquids within the human or animal body that transport nutrients and waste, including blood, lymph, and interstitial fluid.