Which of the following statements is not true? A. Using the relevant historical arithmetic return is typically recommended as a guide when forecasting future returns B. A geometric return is similar to an internal rate of return C. The arithmetic return will equal the geometric return if the volatility of the periodic returns is zero D. None of the above (i.e., all are true) Over the course of a year, your portfolio returned 8%, with an annualized volatility of 15%. The average inflation rate and risk free rate for that year were 1.5% and 1%, respectively. The Sharpe ratio of your portfolio for that year was approximately: A. 37 B. 43 C. 47 D. 53 Which of the following statements are true regarding the utility theory and risk aversion? A. Most investors require increasing amounts of return to accept an additional unit of risk B. Risk neutral investors will generally choose the asset with the higher expected return when presented with a choice of two assets C. The coefficient of risk aversion does not apply to risk seeking investors D. The optimal portfolio may be different for two investors with the same indifference curve Assume the complete portfolio has an expected return of 10% and the risk free rate is 1%. However, you wish to lever your portfolio by 50% (i.e., y = 1.5) and the cost to borrow to do so is 2%. Your expected return is: A. 14.5% B. 14.0% C. 13.0% D. 12.5%