In the Mean-Standard Deviation Graph,which One of the Following Statements

question 64

Multiple Choice

In the mean-standard deviation graph,which one of the following statements is true regarding the indifference curve of a risk-averse investor?

• A)It is the locus of portfolios that have the same expected rates of return and different standard deviations.
• B)It is the locus of portfolios that have the same standard deviations and different rates of return.
• C)It is the locus of portfolios that offer the same utility according to returns and standard deviations.
• D)It connects portfolios that offer increasing utilities according to returns and standard deviations.
• E)none of the above.

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Definitions:

Measure of Variability

A statistic that describes the degree to which scores in a distribution spread out or cluster together, such as range, variance, or standard deviation.

Statistic

A numerical measure that describes a characteristic of a sample derived from a larger population.

Asymmetrical

Lacking symmetry; when two sides or halves of something do not match or are not equal in shape, size, or composition.

Distribution

The way in which something is shared or exists over a particular area or among a particular group of people.