According to Markowitz and other proponents of modern portfolio theory which of the following activities would not be expected to produce any benefits?
A)Diversification
B)Investing in Treasury bonds
C)Investing in shares of utility companies
D)Engaging in active portfolio management to enhance returns

Question

Quizplus · Accepted Answer

According to modern portfolio theory, engaging in active portfolio management to enhance returns would not be expected to produce any benefits because it is difficult to consistently outperform the market and the additional costs associated with active management can erode returns. Diversification, investing in Treasury bonds, and investing in shares of utility companies are all expected to produce benefits according to modern portfolio theory.

According to Markowitz and Other Proponents of Modern Portfolio Theory