If the market portfolio is expected to offer returns of 16%, then what can be said about a portfolio expected to return 13%?
A)it plots below the security market line.
B)part of the portfolio is invested in treasury bills.
C)the portfolio is not diversified.
D)the portfolio's Beta is less than 1.0.

Question

Quizplus · Accepted Answer

A portfolio expected to return less than the market portfolio likely has a beta less than 1.0, indicating it is less volatile and has lower expected returns than the market.

If the Market Portfolio Is Expected to Offer Returns of 16