The Table Below Gives Statistics Relating to a Hypothetical 10-Year

question 130

Multiple Choice

The table below gives statistics relating to a hypothetical 10-year record of two portfolios. Assume other statistics relating to these portfolios are the same and the risk-free rate is 3.5%. Using the coefficient of variation and the Sharpe ratio, the fund that is preferred in terms of relative risk and return per unit of risk is ________.

• A) Portfolio A because it has a higher coefficient of variation and a lower Sharpe ratio
• B) Portfolio A because it has a lower coefficient of variation and a higher Sharpe ratio
• C) Portfolio B because it has a higher coefficient of variation and a lower Sharpe ratio
• D) Portfolio B because it has a lower coefficient of variation and a higher Sharper ratio

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Definitions:

Primary Somatic Sensory

This refers to the primary sensory cortex that receives and processes sensory information from the somatic (body) regions.

Postcentral Gyrus

A region of the cerebral cortex located immediately posterior to the central sulcus, responsible for processing somatosensory information.

Precentral Gyrus

The region of the cerebral cortex located in the frontal lobe, directly involved in controlling voluntary movements.

Prefrontal Gyrus

A portion of the frontal lobe in the brain, important for higher cognitive functions such as decision-making and social behavior.