Q21
A 'Risk-Adjusted Return' is calculated as Returns - (0.5 * Volatility). Which portfolio has the highest Risk-Adjusted Return?
Correct Option: A
Detailed Solution
P1: 80 - 0.5(40) = 60. P2: 60 - 0.5(20) = 50. P3: 90 - 0.5(80) = 50. P4: 70 - 0.5(50) = 45. Portfolio 1 is highest.

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