Investors can form risky portfolios out of more than 2 risky assets. Which of the following statements is correct?
A. Out of all feasible risky portfolios, an efficient portfolio should have the lowest volatility.
B. Out of all feasible risky portfolios, the minimum variance portfolio should have the lowest volatility.
C. Out of all feasible risky portfolios, an efficient portfolio should have the highest expected return.
D. It is efficient to invest 100% in the risky asset with the highest expected return and highest volatility.

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Investors can form risky portfolios out of more than 2 risky assets. Which of the following statements is correct?
A. Out of all feasible risky portfolios, an efficient portfolio should have the lowest volatility.
B. Out of all feasible risky portfolios, the minimum variance portfolio should have the lowest volatility.
C. Out of all feasible risky portfolios, an efficient portfolio should have the highest expected return.
D. It is efficient to invest 100% in the risky asset with the highest expected return and highest volatility.

Answer :

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Pragyavermav1go Pragyavermav1go · Answer 1

Investors can form risky portfolios out of more than 2 risky assets. The statements that are correct are:

1. Out of all feasible risky portfolios, the minimum variance portfolio should have the lowest volatility.

2. All investors, regardless of risk aversion levels, will choose optimal complete portfolios on the same capital allocation line.

3. Investors’ risk aversion levels do not affect their optimal portfolio decisions.

An investor is someone who allocates financial capital with the expectancy of a future return (profit) or to benefit from a bonus (interest). via this allocated capital maximum of the time, the investor purchases a few species of belongings.

As a leading investor, you are not a proprietor. in case you purchase equity in an employer, you have got made ownership funding. The return you earn might be your proportional proportion of the commercial enterprise's earnings. The preliminary funding quantity will stay tied up in the employer's general price.

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