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Given Two Portfolios: A, Which Has an Expected Return of 14

question 47

Multiple Choice

Given two portfolios: A, which has an expected return of 14% and a beta of 1.2; and B, which has an expected return of 15% and a beta of 1.6. Which of the two portfolios has high level of relative risk?


Definitions:

Capital Per Employee

A measure of how much capital investment is allocated per employee, indicating the level of investment in tools, technology, and equipment to enhance productivity.

Human Capital

The collective skills, knowledge, or other intangible assets of individuals that can be used to create economic value for the individuals, their employers, or the community.

Physical Capital

Consists of tangible, man-made objects that a business uses to produce goods or services.

Stressful Travel

The experience of significant discomfort or anxiety during travel, often due to factors such as delays, crowded conditions, or fear of flying.

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