Dear John Sir,
Which ONE of the following statements is true, if a decision is made using expected values?
A The risk is minimised for a set level of return
B The risk is minimised irrespective of the level of return
C The return is maximised for a given level of risk
D The return is maximised irrespective of the level of risk
Sir would you mind explaining why the answer is D to this question?
Ask the Tutor ACCA PM
EV
5y ago#1I think it should be clear that we are maximising rather than minimising the return.
As I explain in my free lectures on this, expected values take no account of risk.
Sign in to reply to this topic.