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A portfolio manager is considering 3 securities to add to her portfolio. The risk-free rate is 2.0%. Excess Return Standard Deviation RST Inc. 6.0% 8.25%

A portfolio manager is considering 3 securities to add to her portfolio. The risk-free rate is 2.0%.

Excess Return Standard Deviation RST Inc. 6.0% 8.25% UVW Corp. 10.0% 15.0% XYZ Ltd. 8.0% 12.0%

Which security would provide the manager with the best risk-adjusted rate of return?

a. Either UVW Corp. or XYZ Ltd.

b. RST Inc.

c. Either RST Inc. or XYZ Ltd.

d. XYZ Ltd.

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