$$\begin{array} { l l l l }
& \text { National Banks } & \text { Bank A } & \text { Bank B } \
\text { Real Estate Loans } & 60 \text { percent } & 30 \text { percent } & 56 \text { percent } \
\text { Consumer Loans } & 20 \text { percent } & 30 \text { percent } & 28 \text { percent } \
\text { Commercial Loans } & 20 \text { percent } & 10 \text { percent } & 16 \text { percent }
\end{array}$$
-If Bank A's average return on its loan portfolio is lower than that of Bank B's,

Question

$$\begin{array} { l l l l } 
& \text { National Banks } & \text { Bank A } & \text { Bank B } \
\text { Real Estate Loans } & 60 \text { percent } & 30 \text { percent } & 56 \text { percent } \
\text { Consumer Loans } & 20 \text { percent } & 30 \text { percent } & 28 \text { percent } \
\text { Commercial Loans } & 20 \text { percent } & 10 \text { percent } & 16 \text { percent }
\end{array}$$
-If Bank A's average return on its loan portfolio is lower than that of Bank B's,

Quizplus · Accepted Answer

Bank A has a higher proportion of consumer loans, which typically have lower returns and higher risk, leading to a lower risk-adjusted return and potentially higher standard deviation compared to Bank B.

-If Bank A's Average Return on Its Loan Portfolio Is