Question

| | A | B | C | D | Market | |---|---|---|---|---|---| | Average Return | 12% | 10% | 15% | 20% | 8% | | Beta | 1.2 | 0.8 | 1 | 2 | 1 | | STD. | 20% | 16% | 30% | 45% | 15% | Which portfolio is most preferable if an investor plans to only invest in this portfolio? Risk-free rate = 0. - A - B - C - D

          |  | A | B | C | D | Market |
|---|---|---|---|---|---|
| Average Return | 12% | 10% | 15% | 20% | 8% |
| Beta | 1.2 | 0.8 | 1 | 2 | 1 |
| STD. | 20% | 16% | 30% | 45% | 15% |

Which portfolio is most preferable if an investor plans to only invest in this portfolio? Risk-free rate = 0.

- A
- B
- C
- D

| | A | B | C | D | Market |
|—|—|—|—|—|—|
| Average Return | 12% | 10% | 15% | 20% | 8% |
| Beta | 1.2 | 0.8 | 1 | 2 | 1 |
| STD. | 20% | 16% | 30% | 45% | 15% |

Which portfolio is most preferable if an investor plans to only invest in this portfolio? Risk-free rate = 0.

- A
- B
- C
- D

Added by Joel W.

Finite Mathematics and Calculus with Applications

Margaret L. Lial, Raymond N. Greenwell,… 9th Edition

Instant Answer

Solved by Expert Ivan Kochetkov

04/06/2025

Step 1

Since the risk-free rate is 0, we use the Sharpe Ratio, which is calculated as: \[ \text{Sharpe Ratio} = \frac{\text{Average Return} - \text{Risk-Free Rate}}{\text{Standard Deviation}} \] Show more…

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