The risk free rate, average returns, standard deviations and betas for three funds and the S&P500 are given below.
-If these portfolios are subcomponents which make up part of a well diversified portfolio then portfolio ______ is preferred.
A) A
B) B
C) C
D) S&P500

Question

The risk free rate, average returns, standard deviations and betas for three funds and the S&P500 are given below. 
-If these portfolios are subcomponents which make up part of a well diversified portfolio then portfolio ______ is preferred.
A) A 
B) B 
C) C 
D) S&P500

Quizplus · Accepted Answer

Portfolio B is preferred as it is a subcomponent of a well-diversified portfolio, which suggests it contributes to diversification and potentially reduces risk.

The Risk Free Rate, Average Returns, Standard Deviations and Betas