Asset A has an expected return of 15% and standard deviation of 20%. Asset B has an expected return of 20% and standard deviation of 15%. The riskfree rate is 5%. A risk-averse investor would prefer a portfolio using the risk-free asset and _______.

A) asset A

B) asset B

C) no risky asset

D) cannot tell from data provided

4. The Sharpe-ratio is useful for

A) borrowing capital for investing

B) investing available capital

C) correctly forming portfolios

D) rank ordering portfolios

5. The least risky portfolio can be identified by finding _____________.

A) the minimum-variance point on the efficient frontier

B) the maximum-return point on the efficient frontier

C) the tangency-point of the capital allocation line and the efficient frontier

D) none of the above answers is correct