-If Bank A's Average Return on Its Loan Portfolio Is

question 52

Multiple Choice

$$\begin{array} { l l l l } & \text { National Banks } & \text { Bank A } & \text { Bank B } \\\text { Real Estate Loans } & 60 \text { percent } & 30 \text { percent } & 56 \text { percent } \\\text { Consumer Loans } & 20 \text { percent } & 30 \text { percent } & 28 \text { percent } \\\text { Commercial Loans } & 20 \text { percent } & 10 \text { percent } & 16 \text { percent }\end{array}$$
-If Bank A's average return on its loan portfolio is lower than that of Bank B's,

• A)its risk-adjusted return is higher than Bank B's.
• B)its risk-adjusted return is lower than Bank B's.
• C)its standard deviation is lower than Bank B's.
• D)its standard deviation is higher than Bank B's.
• E)Answers b and d

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