Question
i know the answers for both questions im just not understanding why in the first one she will inves in Y and in the second
i know the answers for both questions im just not understanding why in the first one she will inves in Y and in the second question we dont know the investors question.just need some help understanding
An investor knows the following about assets X and Y: E[rX]=0, Var(rX)=0.9, E[rY]=0.05, Var(rY)=0. If we know she can invest only in X or only in Y, but not in both, what is the correct statement?
A. She will invest only in Y. B. She will invest only in X. C. It is the same for her to invest in X or in Y. D. She will not invest her money in X nor in Y. E. Without knowing the investor's preferences, we cannot state which is better.
An investor knows the following about assets X and Y: E[rX]=0, Var(rX)=0.2, E[rY]=0.12, Var(rY)=0.4. If we know she can invest only in X or only in Y, but not in both, what is the correct statement?
A. She will invest only in Y. B. She will invest only in X. C. It is the same for her to invest in X or in Y. D. She will not invest her money in X nor in Y. E. Without knowing the investor's preferences, we cannot state which is better.
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