Question: Two assets, A and B, have identical expected returns -- 5% each -- and standard deviations of 15% and 20%, respectively. The assets are less

Two assets, A and B, have identical expected returns -- 5%

Two assets, A and B, have identical expected returns -- 5% each -- and standard deviations of 15% and 20%, respectively. The assets are less than perfectly correlated. If you are risk averse, and you can only make one of the following investments, rank order them in terms of the best risk-return tradeoff: Port-a portfolio that is invested 50% in A and 50% in B A- a portfolio that is invested 100% in A B-a portfolio that is invested 100% in B O A, B, Port O B, A, Port O Port, A, B Since all investments have the same expected return, all are equally attractive

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