Asset A has an expected return of 15% and a reward-to-variability (Sharpe) ratio of .4. Asset B has an expected return of 20% and a reward-to-variability (Sharpe) ratio of .3. A rational risk-averse investor would prefer which of the above assets?
A) asset A
B) asset B
C) no risky asset
D) can't tell from the data given
Answer: A
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