Question

Consider the risky portfolios with expected returns and standard deviations of returns as given in the table below. Which of the statements about the portfolios that follow is true?

Portfolio |
Expected Return |
Standard Deviation |

A |
10% |
5% |

B |
21% |
11% |

C |
18% |
23% |

D |
24% |
16% |

**Group of answer choices**

Portfolio C dominates portfolio A.

Portfolio B dominates portfolio C.

Portfolio B dominates portfolio A.

Portfolio D dominates portfolio B.

Answer #1

**CoV is statistical measure which helps in calculating in
SD required to generate a 1% of return (Lower the
Better)**

Coefficient of Variation of Portfolios

Portfolio A = Standard Deviation / return = 5% / 10% = 0.50

Portfolio B = Standard Deviation / return = 11% / 21% = 0.52

Portfolio C = Standard Deviation / return = 23% / 18% = 1.28

Portfolio D = Standard Deviation / return = 16% / 24% = 0.67

Ranking

**1 - A**

**2 - B**

**3 - D**

**4 - C**

**Option B is correct Portfolio B dominates portfolio
C.**

**Please dont forget to upvote**

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Group of answer choices
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