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A financial advisor must choose one of the funds below to recommend to her clients, without knowing her clients risk preferences. Risk-Free Rate 4% Expected

A financial advisor must choose one of the funds below to recommend to her clients, without knowing her clients risk preferences.

Risk-Free Rate 4%
Expected Return Volatility
Fund A 10% 10%
Fund B 15% 22%
Fund C 6% 2%
Fund D 7% 12%
Fund E 18% 24%

Whichever fund she recommends, her clients will then combine it with risk-free borrowing and lending depending on their desired level of risk. Assume a risk-free rate of 4%. Which fund would she recommend?

a. Fund C
b. Fund A
c. Fund B
d. Fund E
e. Fund D

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