Question
Within a mean–variance framework, where expected profit is desirable and its standard deviation measures risk, which strategy-selection rule is consistent with risk aversion?
The correct answer is
If two strategies have the same expected profit, select the one with smaller standard deviation
For equal expected profits, select the strategy with the smaller standard deviation. It has less risk without sacrificing expected return in the stated mean–variance comparison.
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Important Questions from Economy
- At the time of independence, which sector contributed the largest share to India's national income?
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- Which of the following statements regarding the estimation of India's national and per capita income during the colonial rule is correct?
What was one of the major characteristics of India's economy at the time of independence in 1947?
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