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

question 1

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

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