The Distributions of Rates of Return for Companies AA and BB

question 139

True/False

The distributions of rates of return for Companies AA and BB are given below:
​
​
We can conclude from the above information that any rational,risk-averse investor would be better off adding Security AA to a well-diversified portfolio over Security BB.

---

Definitions:

Totalitarian

A system of government where the state recognizes no limits to its authority and strives to regulate every aspect of public and private life wherever feasible.

Federal Republic

A form of government composed of a union of states or regions under a central (federal) government, with powers divided between the central government and its constituent parts.

Tenth Amendment

An amendment to the United States Constitution that emphasizes the federal system of government by stating that powers not delegated to the federal government nor prohibited to the states, are reserved to the states or to the people.

Federal System

A system of government where power is divided between a central (or federal) government and regional (state or provincial) governments.