Question 1

In words, the covariance considers the probability of each scenario happening and the interaction between

Accepted Answer

A)  securities' returns relative to their variances.
B)  securities' returns relative to their mean returns.
C)  securities' returns relative to other securities' returns.
D)  the level of return a security has in that scenario and the overall portfolio return.

Question 2

The measure of risk in a Markowitz efficient frontier is

Accepted Answer

A)  specific risk.
B)  standard deviation of returns.
C)  reinvestment risk.
D)  beta.

Question 3

An investor who wishes to form a portfolio that lies to the right of the optimal risky portfolio on the capital allocation line must

Accepted Answer

A)  lend some of her money at the risk-free rate.
B)  borrow some money at the risk-free rate and invest in the optimal risky portfolio.
C)  invest only in risky securities.
D)  borrow some money at the risk-free rate, invest in the optimal risky portfolio, and invest only in risky securities

Exam 7: Optimal Risky Portfolios

The measure of risk in a Markowitz efficient frontier is

Correct Answer
verified

An investor who wishes to form a portfolio that lies to the right of the optimal risky portfolio on the capital allocation line must

Correct Answer
verified

In words, the covariance considers the probability of each scenario happening and the interaction between

Correct Answer
verified

Exam 7: Optimal Risky Portfolios

The measure of risk in a Markowitz efficient frontier is

Correct AnswerverifiedShow Answer

An investor who wishes to form a portfolio that lies to the right of the optimal risky portfolio on the capital allocation line must

Correct AnswerverifiedShow Answer

In words, the covariance considers the probability of each scenario happening and the interaction between

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified