Asset a Has an Expected Return of 15% and a Reward-To-Variability

question 12

Multiple Choice

Asset A has an expected return of 15% and a reward-to-variability ratio of .4.Asset B has an expected return of 20% and a reward-to-variability ratio of .3.A risk-averse investor would prefer a portfolio using the risk-free asset and ______.

• A) asset A
• B) asset B
• C) no risky asset
• D) can't tell from the data given

---

Definitions:

Scaffolding

An educational approach involving more knowledgeable others providing temporary supports to help a learner achieve higher levels of understanding.

Zone of Proximal Development

A concept in developmental psychology introduced by Lev Vygotsky, describing the difference between what a learner can do without help and what they can achieve with guidance and encouragement.

Reinforcements

In behavioral psychology, stimuli used to increase the likelihood of a repeated behavior by applying rewarding or punishing consequences.

Conservation

In psychology, the understanding that certain properties of objects remain the same despite a change in the object's form or appearance.