QUESTION 8

1. Which of the following statements about the risk-return trade off is true?

   	a.	Portfolio A dominates portfolio B if porfolio A has a higher expected return than portfolio B.
   	b.	Sharpe ratio measures the risk premium for one unit of systematic risk.
   	c.	If an investor is risk netural, the investment attractiveness increases with expected return and decreases with risk.
   	d.	Assuming the return is normally distributed with a postive mean and variance, the probability of an investment loss is smaller in the long run.
   	e.	Portfolio A dominates portfolio B if porfolio A has a smaller variance than portfolio B.