The Risk Free Rate, Average Returns, Standard Deviations and Betas

question 48

Multiple Choice

The risk free rate, average returns, standard deviations and betas for three funds and the S&P500 are given below.
-If these portfolios are subcomponents which make up part of a well diversified portfolio then portfolio ______ is preferred.

• A) A
• B) B
• C) C
• D) S&P500

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Definitions:

Logrolling

Logrolling involves the exchange of favors, especially in politics, by reciprocal voting for each other's proposed legislation.

Highly Preferred Outcome

A result or conclusion that is significantly favored or desired over other possible outcomes.

Integrative Agreements

Negotiation outcomes that involve creative solutions allowing all parties to achieve their objectives, often leading to mutual benefits.

Objective Outcomes

The measurable, tangible results achieved from an action or process, which can be observed and quantified.