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Portfolio a Has Expected Return of 10% and Standard Deviation

Question 56

Multiple Choice

Portfolio A has expected return of 10% and standard deviation of 19%.Portfolio B has expected return of 12% and standard deviation of 17%.Rational investors will


A) Borrow at the risk free rate and buy A.
B) Sell A short and buy B.
C) Sell B short and buy A.
D) Borrow at the risk free rate and buy B.
E) Lend at the risk free rate and buy B.

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