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Assume a world with two risky assets ( R 1 and R 2 ) . R 1 has an expected rate of return of 1
Assume a world with two risky assets R and R R has an expected rate of return of and standard deviation of R offers an expected return of but has a standard deviation of The riskfree rate is Using Sharpe ratios explain if the following statement is true or false: A risk averse investor would prefer R over R
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