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Investments a and B Both Offer an Expected Rate of Return

Question 45

Multiple Choice

Investments A and B both offer an expected rate of return of 12%. If the standard deviation of A is 20% and that of B is 30%, then investors would:

A) Prefer A to B
B) Prefer B to A
C) Prefer a portfolio of A and B
D) Cannot answer without knowing investor's risk preferences

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