To identify the efficient portfolio we must know ________,________,________ between investments.
A) risk level, required return, profitability
B) value of risk free, required return, correlations
C) expected return, volatilities, correlations
D) systematic risk, nonsystematic risk and required return

Question

Quizplus · Accepted Answer

To identify the efficient portfolio, we need to consider the expected return, volatilities and correlations between investments. Expected return and volatility help us to quantify the risk and return potential of individual investments. Correlations help us to understand how the investments move in relation to each other, which is important when constructing a diversified portfolio. The value of risk-free investments, required return, systematic and nonsystematic risk are also important factors, but they are not sufficient on their own to identify the efficient portfolio.

To Identify the Efficient Portfolio We Must Know ________,________,________ Between

To Identify the Efficient Portfolio We Must Know ,, Between