You Are Comparing the Returns on Two Portfolios for a 10-Year

question 37

Multiple Choice

You are comparing the returns on two portfolios for a 10-year period.Portfolio I has a lower dispersion of returns and a higher average rate of return than Portfolio II.Given this,what do you know with certainty?

• A)Portfolio I has a lower standard deviation than Portfolio II.
• B)Portfolio I consists of more dividend-paying stocks than Portfolio II.
• C)Portfolio II has less total risk than Portfolio I.
• D)Portfolio I will outperform Portfolio II over the next 10 years.
• E)Portfolio II consists of more individual stocks than Portfolio I.

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Definitions:

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A southeastern U.S. state known for its beaches, theme parks, and as a popular destination for retirees.

Oklahoma

A state located in the south-central region of the United States.

Whig Party

A political party in the United States (1834–1856) that opposed the policies of President Andrew Jackson and the Democrats.