Allison's Portfolio Has an Expected Return of 14% and a Standard

question 18

Multiple Choice

Allison's portfolio has an expected return of 14% and a standard deviation of of 20%. Brianna's portfolio has an expected rate of return of 11% and a standard deviation of 12%. The risk-free rate is 3%. According to the Sharpe measure,

• A) Allison has the better portfolio.
• B) Brianna has the better portfolio.
• C) The portfolio's are equally desirable.
• D) The answer depends on Allison and Brianna's risk tolerance.

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Definitions:

DNA Replication

The biological process of producing two identical replicas from one original DNA molecule, critical during cell division.

Lagging Strand

The lagging strand is one of the strands of DNA formed during DNA replication, synthesized discontinuously in segments known as Okazaki fragments, opposite the continuous leading strand.

Transcription

The process by which the information in a strand of DNA is copied into a new molecule of messenger RNA (mRNA), initiating gene expression.

Translation

The process in which cellular ribosomes create proteins, mapping instructions from mRNA to synthesize the specific protein.