If asset A's return is exactly two times asset B's return, then following risk return tradeoff, the standard deviation of asset A should be _ times the standard deviation of asset B.

Question

Quizplus · Accepted Answer

According to the risk-return tradeoff, higher returns are accompanied by higher risk. Since asset A has twice the return of asset B, it should also have twice the risk in terms of standard deviation. Therefore, the standard deviation of asset A should be 2 times the standard deviation of asset B. So, the correct choice is C.

If Asset A's Return Is Exactly Two Times Asset B's