Consider these two investment strategies: $$\begin{array} { | l | l | l | }
\hline & \text { Strategy 1 } ( \% ) & \text { Strategy 2 } ( \% ) \
\hline \text { Expected return } & 6 & 9 \
\hline \text { Standard deviation } & 0 & 4 \
\hline \text { Highest return } & 6 & 15 \
\hline \text { Lowest return } & 6 & 6 \
\hline
\end{array}$$ 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: $$\begin{array} { | l | l | l | } 
\hline & \text { Strategy 1 } ( \% ) & \text { Strategy 2 } ( \% ) \
\hline \text { Expected return } & 6 & 9 \
\hline \text { Standard deviation } & 0 & 4 \
\hline \text { Highest return } & 6 & 15 \
\hline \text { Lowest return } & 6 & 6 \
\hline
\end{array}$$ 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 is dominant because its return is always at least equal to Strategy 1's return and can be greater, offering a higher expected return with some variability.

Consider These Two Investment Strategies Strategy __________ Is the Dominant Strategy Because __________

Consider These Two Investment Strategies Strategy Is the Dominant Strategy Because