Which of the Following Statements Is True

question 20

Multiple Choice

Which of the following statements is true?

• A) While asset classes with higher standard deviations tend to have higher returns, this relationship seems to break down for specific securities.
• B) Asset classes with higher standard deviations tend to have higher returns, and this relationship tends to hold true when examining specific securities as well.
• C) Asset classes with higher standard deviations tend to have higher returns, but when we examine specific assets within those classes we find that high standard deviation securities tend to have lower returns.
• D) None of the above

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Definitions:

Celsius

A scale and unit of measurement for temperature where 0 degrees represents the freezing point of water, and 100 degrees represents the boiling point.

Arteriosclerosis

The thickening, hardening, and loss of elasticity of the walls of arteries, often leading to restricted blood flow.

Atherosclerosis

A condition characterized by the hardening and narrowing of the arteries due to the buildup of plaque on the artery walls.