Which of the Following Pairs of Portfolios Exemplifies the Risk-Return

question 130

Multiple Choice

Which of the following pairs of portfolios exemplifies the risk-return tradeoff?

• A)For Portfolio A, the average return is 6 percent and the standard deviation is 15 percent; for Portfolio B, the average return is 6 percent and the standard deviation is 25 percent.
• B)For Portfolio A, the average return is 5 percent and the standard deviation is 15 percent; for Portfolio B, the average return is 8 percent and the standard deviation is 15 percent.
• C)For Portfolio A, the average return is 5 percent and the standard deviation is 25 percent; for Portfolio B, the average return is 8 percent and the standard deviation is 15 percent.
• D)For Portfolio A, the average return is 5 percent and the standard deviation is 15 percent; for Portfolio B, the average return is 8 percent and the standard deviation is 25 percent.

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Definitions:

Sale of Goods

A transaction between a buyer and a seller involving the transfer of ownership of goods from one party to another for a price.

Secondary Obligation

A duty or liability that is dependent on the occurrence or non-occurrence of certain conditions or the failure to perform a primary obligation.

Promissory Estoppel

A legal principle that prevents a party from withdrawing a promise if the other party has significantly relied on that promise to their detriment, even if there is no formal contract.

Statute Of Frauds

A legal principle that requires certain types of contracts to be in writing and signed by the parties involved to be enforceable.