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Jonathan's portfolio has an expected return of 22%, a standard deviation of 18%, and a beta of 1.6. Jason's portfolio has an expected rate of return of 16%, a standard deviation of 11%, and a beta of 1.2. The risk-free rate is 3%. According to the Sharpe measure,

Jonathan has the better portfolio.

Jason has the better portfolio.

The portfolios are equally desirable.

The answer depends on Jonathan’s and Jason’s risk tolerance.

Financial Management, Finance

  • Category:- Financial Management
  • Reference No.:- M92376140

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