You are considering two alternative two-year investments: You can invest in a risky asset with a positive risk premium and returns in each of the two years that will be identically distributed and uncorrelated, or you can invest in the risky asset for only one year and then invest the proceeds in a risk-free asset. Which of the following statements about the first investment alternative (compared with the second) are true?<br>
c.Its annualized standard deviation is lower.<br>
True<br>
d.Its Sharpe ratio is higher.<br>
False


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