Susan is planning to invest in one of four stock portfolios, and her financial advisor has given her details regarding the risk associated with each portfolio. Which of the following portfolios would you expect to have the highest average annual rate of return?
a. A portfolio with a standard deviation of 3%.
b. A portfolio with a standard deviation of 6%.
c. A portfolio with a standard deviation of 9%.
d. A portfolio with a standard deviation of 12%.
d
Economics
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A financial panic was averted in October 1987 following "Black Monday" when the Fed announced that
A) it was lowering the discount rate. B) it would provide discount loans to any bank that would make loans to the security industry. C) it stood ready to purchase common stocks to prevent a further slide in stock prices. D) it was raising the discount rate.
Economics
Explain why using leverage to purchase risky securities is so popular.
What will be an ideal response?
Economics