The Markowitz Portfolio Approach considers:
A)the value of currency currently compared to the value of currency at specific points in the past.
B)the value of currency currently compared to estimates of the value at specific points in the future.
C)why firms engage in risky transactions.
D)the interactions between assets in determining risks.

Question

Quizplus · Accepted Answer

The Markowitz Portfolio Approach considers the interactions between assets in determining risks. It aims to minimize risks by diversifying a portfolio across multiple assets that are not perfectly correlated. This approach considers the co-variance between the assets, which determines how their returns tend to move together. The approach does not consider the value of currency currently compared to past or future estimates, or why firms engage in risky transactions.

The Markowitz Portfolio Approach Considers