Which of the following statements is most correct?
A)An inefficient portfolio maximizes return for a given level of risk, or minimizes risk for a given level of return.
B)A single asset is called a portfolio
C)The goal of an efficient portfolio is to maximize risk for a given level of return.
D)Combining positively correlated assets having the same expected return results in a portfolio with the same level of expected return and a lower level of risk.
E)none of the above
Same as 88 with "none of the above" answer

Question

Quizplus · Accepted Answer

None of the statements is correct. 
A) An inefficient portfolio either maximizes risk for a given level of return or minimizes return for a given level of risk. 
B) A single asset is not a portfolio, as it contains only one asset. 
C) The goal of an efficient portfolio is to maximize return for a given level of risk or minimize risk for a given level of return. 
D) Combining positively correlated assets having the same expected return results in a portfolio with the same level of expected return but a higher level of risk due to the diversification effect.

Which of the Following Statements Is Most Correct