The Standard Deviation of Returns of an Inefficient Portfolio Is

question 3

Multiple Choice

The standard deviation of returns of an inefficient portfolio is __________ the standard deviation of an efficient portfolio,provided both portfolios have equal expected returns.

• A) lower than
• B) higher than
• C) the same as

---

Definitions:

Optimal Level

The most favorable or desirable degree or amount of something for achieving the best result or outcome.

Actual Stressors

Real and tangible factors in one's environment that cause stress.

Anticipatory Stressors

Upcoming or future events that are perceived to be threatening.

Sympathetic Division

Part of the autonomic nervous system that prepares the body for stressful or energetic activity, often termed the "fight or flight" system.