By Definition There Is No Uncertainty About the Terminal Value

question 27

Multiple Choice

By definition there is no uncertainty about the terminal value of the risk free asset for all of the following reasons EXCEPT

• A) the standard deviation of the return is one
• B) the expected return is certain
• C) the standard deviation of the return is zero
• D) the investor knows exactly what the terminal wealth will be

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Definitions:

Grammatical Construction

The arrangement and relationship of words, phrases, and clauses in sentences, adhering to the rules of a language.

Necessarily False

A statement or proposition that cannot be true under any circumstances.

Probably True

A statement or idea that is likely to be correct or accurate based on the available evidence.

Tautology

An expression or phrase that redundantly states the same concept in different words, effectively redundant in its logical or semantic content.