A manager who uses the mean-variance theory to construct an optimal portfolio will satisfy
A) investors with low risk-aversion coefficients.
B) investors with high risk-aversion coefficients.
C) investors with moderate risk-aversion coefficients.
D) all investors regardless of their level of risk aversion.
E) only clients with whom she has established long-term relationships because she knows their personal

Question

Quizplus · Accepted Answer

The optimal portfolio will be the one with the highest reward-to-variability ratio. Investors can choose forthemselves how they want to combine this portfolio with the risk-free asset to take on more or less risk.

A Manager Who Uses the Mean-Variance Theory to Construct an Optimal