The following equally likely outcomes have been estimated for the returns on Portfolio P and Portfolio Q:
Question:
The following equally likely outcomes have been estimated for the returns on Portfolio P and Portfolio Q:
Scenario Portfolio P Portfolio Q
1 4.0% 11.0%
2 7.0% -7.0%
3 -3.0% 15.0%
4 9.0% -9.0%
Which of the two portfolios is riskier?
Group of answer choices
Portfolio Q since its returns are more widely dispersed around the expected return
Portfolio P since it has the higher expected return
Portfolio Q since it has the possibility of a negative return
Both portfolios are equally risky since the possible returns of each are equally likely to occur
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill