An adviser evaluating two portfolios with equal returns should generally prefer the one with which characteristic?

a.The higher standard deviation
b.The higher beta
c.The lower standard deviation
d.The lower correlation to Treasury bills

Explicación

When two portfolios offer the same expected return, the one with lower standard deviation carries less risk and is therefore more efficient. Rational, risk-averse investors prefer less volatility for the same reward. This risk-adjusted thinking underlies measures like the Sharpe ratio.

Practica las 110 preguntas gratis — sin registro.

Preguntas relacionadas de este tema

Última revisión: · proceso editorial

Equipo Editorial de PrepPass · Verificado con NASAA Series 65 Investment Adviser Law Exam · Cómo revisamos
Reportar