The following table shows the annual returns (in percent)Chevron and Caterpillar for 2007-2010. 
a.Which fund had the higher arithmetic average return?
b.Which fund was riskier over this time period?
c.Given a risk-free rate of 1%,which fund has the higher Sharpe ratio?What does this imply?
Definitions:
Groupthink
A psychological phenomenon within a group of people, where the desire for harmony or conformity results in an irrational or dysfunctional decision-making outcome.
Group Members
Individuals who are part of a specific collection or assembly, sharing common goals, interests, or purposes within the group.
Confederates
Individuals who are part of an experiment but pretend to be participants, aiding in the research without the real participants' knowledge.
Milgram
Refers to Stanley Milgram, a psychologist known for his experiments on obedience to authority figures, demonstrating people's willingness to follow orders from an authority figure that involved harming another person.
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