Asset A has an expected return of 15% and a reward-to-variability ratio of .4. Asset B has an expected return of 20% and a rewar

Question

WITCHER [35]

3 years ago

11

Asset A has an expected return of 15% and a reward-to-variability ratio of .4. Asset B has an expected return of 20% and a rewar

d-to-variability ratio of .3. A risk-averse investor would prefer a portfolio using the risk-free asset and ______.

Mathematics

1 answer:

Katena32 [7] · Answer 1 · 2022-07-08T04:43:07+03:00

Answer:

Asset A

Step-by-step explanation:

Asset A has an expected return of 15% and a reward - to - variability ratio of .4 . Assets B has an expected return of 20% and a reward - to - variability ratio of .3

As reward - to - variability ratio of Asset A is .4 then it will be risk-averse investor.

Asset A is risk- free asset.