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Question
Two assets have the following expected returns and standard deviations when the risk-free rate is 5%:
Asset A E(rA) = 10% σA = 20%
Asset B E(rB) = 15% σB = 27%
An investor with a risk aversion of A = 3 would find that ________ on a risk-return basis.
A) only asset A is acceptable
B) only asset B is acceptable
C) neither asset A nor asset B is acceptable
D) both asset A and asset B are acceptable
Answer
This answer is hidden. It contains 138 characters.
Related questions
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Day
1 2 3 4 Advances
870 760 960 840 Declines
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Q:
Which of the following is not one of the main areas covered in the examinations that must be taken in order to achieve the designation of Chartered Financial Analyst?
A) investment management ethics
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C) securities marketing techniques
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To become a CFA, you must do all of the following except which one?
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Q:
In a defined contribution pension plan, the ________ bears all of the fund's investment performance risk.
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Q:
When life insurance companies seek long term investments, they are focusing on________.
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B) smoothing out long-term returns
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Q:
One of the major functions of the investment committee is to ________.
A) determine security selection of each portfolio operated by the investment company
B) translate the objectives and constraints of the investment company into an asset universe
C) determine the percentages of each security in the total investment company portfolio
D) calculate and report the overall rate of return to investment company constituents