Theoretically,what is meant by the market portfolio?
A) The market index portfolio similar to the S&P 500 or S&P/TSX Composite
B) The world index portfolio similar to the MSCI AC World index
C) All risky assets in the world with their own proportions
D) All assets including risk-free assets

Question

Quizplus · Accepted Answer

The market portfolio theoretically includes all risky assets in the world with their own proportions. This means that it includes all possible combinations of risky assets, including stocks, bonds, commodities, real estate, and any other asset classes that can be invested in. The proportions of each asset in the market portfolio are determined by the market capitalization of each asset, or its total market value. Therefore, the market portfolio represents the collective portfolio of all investors in the world.

Theoretically,what Is Meant by the Market Portfolio