Questions
BU.232.750.51.FA25 Final Exam Fall 2025- Requires Respondus LockDown Browser
Single choice
Partners healthcare case: Which is of commodities or real estate improve the risk return profile and the efficient frontier of the investments?
Options
A.B. REITs are better because they are less risky that n commodities.
B.D. Commodities improve the efficient because they have lower average correlations than REITS with other assets.
C.A. commodities help most because they offer the highest return.
D.C. REITS are superior because they have higher return to risk ratio.
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Step-by-Step Analysis
Question context: Assessing which asset category (commodities or REITs) enhances the risk-return profile and the efficient frontier due to diversification benefits.
Option A: 'commodities help most because they offer the highest return.' This claim focuses on raw returns, not on diversification or correlation benefits. Commodities historically can be volatile and may not consistently offer the highest risk-adjusted returns, so claiming they provide the highest return without addressing correlations or risk is misleading.
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