According to the mean-variance criterion,which of the statements below is correct? $$\begin{array} { l l l }
\text { Investment } & \mathrm { E } ( \mathrm { r } ) & \text { Standard Deviation } \
\mathrm { A } & 10 \% & 5 \% \
\mathrm {~B} & 21 \% & 11 \% \
\mathrm { C } & 18 \% & 23 \% \
\mathrm { D } & 24 \% & 16 \%
\end{array}$$
A)Investment B dominates Investment A.
B)Investment B dominates Investment C.
C)Investment D dominates all of the other investments.
D)Investment D dominates only Investment B.
E)Investment C dominates investment A.

Question

According to the mean-variance criterion,which of the statements below is correct? $$\begin{array} { l l l } 
\text { Investment } & \mathrm { E } ( \mathrm { r } ) & \text { Standard Deviation } \
\mathrm { A } & 10 \% & 5 \% \
\mathrm {~B} & 21 \% & 11 \% \
\mathrm { C } & 18 \% & 23 \% \
\mathrm { D } & 24 \% & 16 \%
\end{array}$$ 
A)Investment B dominates Investment A. 
B)Investment B dominates Investment C.
C)Investment D dominates all of the other investments.
D)Investment D dominates only Investment B.
E)Investment C dominates investment A.

Quizplus · Accepted Answer

Investment B has a higher expected return and a lower standard deviation compared to Investment C, thus dominating it according to the mean-variance criterion.

According to the Mean-Variance Criterion,which of the Statements Below Is