Figure 19-5.On the graph,x represents risk and y represents return.
-Refer to Figure 19-5.Point A represents a situation in which
A) all of a person's savings are allocated to a class of safe assets.
B) the person knows with certainty that his or her return will be 3 percent.
C) the standard deviation of the person's portfolio is zero.
D) All of the above are correct.

Question

Figure 19-5.On the graph,x represents risk and y represents return. 
-Refer to Figure 19-5.Point A represents a situation in which
A) all of a person's savings are allocated to a class of safe assets. 
B) the person knows with certainty that his or her return will be 3 percent. 
C) the standard deviation of the person's portfolio is zero. 
D) All of the above are correct.

Quizplus · Accepted Answer

Point A represents a low-risk, low-return situation where all of a person's savings are allocated to a class of safe assets with a known and certain return (3 percent). In this scenario, the standard deviation of the portfolio is zero since there is no variability in the return. Therefore, all of the choices (A, B, and C) are correct.