The portfolio that contains all risky securities in the market is best described as the:
A) risky portfolio.
B) market portfolio.
C) non-diversified portfolio.

Question

Quizplus · Accepted Answer

The market portfolio is a theoretical bundle of investments that includes every type of asset available in the financial market, with each asset weighted in proportion to its total presence in the market. This concept is central to the Capital Asset Pricing Model (CAPM), which assumes that investors can hold a diversified portfolio of all risky assets, thereby minimizing specific risk through diversification.

The Portfolio That Contains All Risky Securities in the Market