Consider these two investment strategies: Strategy __________ is the dominant strategy because __________.
A)1; it is riskless
B)1; it has the highest reward/risk ratio
C)2; its return is at least equal to Strategy 1 and sometimes greater
D)2; it has the highest reward/risk ratio
E)Both strategies are equally preferred.

Question

Consider these two investment strategies:  Strategy __________ is the dominant strategy because __________.
A)1; it is riskless 
B)1; it has the highest reward/risk ratio 
C)2; its return is at least equal to Strategy 1 and sometimes greater 
D)2; it has the highest reward/risk ratio 
E)Both strategies are equally preferred.

Quizplus · Accepted Answer

Strategy 2 dominates strategy 1, even though it is riskier, because it always returns at least as much as strategy 1 and sometimes more.

Consider These Two Investment Strategies: Strategy __________ Is the Dominant