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Let an investor be considering two risky portfolios: A and B to construct a complete portfolio C with a risk-free asset. The reward-to-variability ratio of

  • Let an investor be considering two risky portfolios: A and B to construct a complete portfolio C with a risk-free asset. The reward-to-variability ratio of portfolio A is 0.14 and reward to variability ratio of portfolio B is 0.12.

     

    Combination of portfolio B and risk-free asset will provide lower expected return for any level of risk than combination of portfolio A and risk-free asset.

    True/false

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