If Asset A's Return Is Exactly Two Times Asset B's

question 100

Multiple Choice

If asset A's return is exactly two times asset B's return, then following risk return tradeoff, the standard deviation of asset A should be ________ times the standard deviation of asset B.

• A) 3
• B) 2
• C) 1
• D) 4

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Definitions:

Time Value

The principle that having money now is preferable to receiving the same sum later on, as it has greater earning potential.

Graphic Portrayal

Graphic portrayal involves the visual representation of data or concepts, using charts, graphs, or other graphical tools to illustrate relationships and trends.

Interest Rate

The proportion of a loan that is charged as interest to the borrower, typically expressed as an annual percentage.

Present Value

The actual value today of future monetary amounts or cash flow series, determined by a specified rate of return.