wo assets have the following expected returns and standard deviations when the risk-free rate is 5%: Asset A E(rA) = 10% σA = 20%  Asset B E(rB) = 15% σB = 27%  An investor with a risk aversion of A = 3 would find that _________________ on a risk return basis. only Asset A is acceptable only Asset B is acceptable neither Asset A nor Asset B is acceptable both Asset A and Asset B are acceptable

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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Two assets have the following expected returns and standard deviations when the risk-free rate is 5%:

Asset A E(rA) = 10% σA = 20% 

Asset B E(rB) = 15% σB = 27% 

An investor with a risk aversion of A = 3 would find that _________________ on a risk return basis.

  1. only Asset A is acceptable
  2. only Asset B is acceptable
  3. neither Asset A nor Asset B is acceptable
  4. both Asset A and Asset B are acceptable
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