Portfolio X Had an Average Quarterly Return of 5

question 11

Multiple Choice

Portfolio X had an average quarterly return of 5.2% with a standard deviation of 6.5%. The market had an average quarterly return of 6.1% with a standard deviation of 10.5%. The average riskfree rate was 3%. Using the reward-to-variability ratio,

• A) the portfolio had an inferior performance.
• B) Portfolio X lies above the ex post CML.
• C) Portfolio X has a slope lower than that of the CML.
• D) there is insufficient data to compare them.

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Definitions:

Genotypes

The genetic makeup of an organism that determines its characteristics.

Biological Characteristics

Innate traits and features of an organism or species, including genetic, morphological, and physiological attributes.

Heredity

The genetic transmission of traits and characteristics from parents to their offspring, influencing various attributes such as appearance and health.

Natural Selection

A mechanism of evolution where organisms better adapted to their environment tend to survive and produce more offspring.