If the market portfolio is expected to return 16%,then a portfolio that is expected to return 13%:
A) plots above the security market line.
B) plots to the right of the market on an SML graph.
C) is not diversified.
D) has a beta that is less than 1.0.

Question

Quizplus · Accepted Answer

A portfolio expected to return less than the market portfolio suggests it has a lower risk, indicated by a beta less than 1.0, assuming the risk-free rate is the same for both.

If the Market Portfolio Is Expected to Return 16%,then a Portfolio