Which of the Following Portfolios Is Clearly Preferred to the Others

question 44

Multiple Choice

Which of the following portfolios is clearly preferred to the others? Expected Standard
Return Deviation
A Return Deviation: 14% Return Deviation: 12%
B Return Deviation:22% Return Deviation:20%
C Return Deviation: 18% Return Deviation:16%

• A)Investment A
• B)Investment B
• C)Investment C
• D)Cannot be determined

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Definitions:

Purely Competitive

A market structure characterized by many buyers and sellers, all of whom have little to no influence on the market price of goods and services.

Marginal Resource Cost

The additional cost incurred by a firm or economy for utilizing one more unit of a resource, used in making efficient production and resource allocation decisions.

Profit-Maximizing

The process by which a firm determines the price and output level that returns the greatest profit.