Which of the following is true of the mean-standard deviation diagram?
A) It plots means on the X-axis and standard deviations on the Y-axis of all feasible portfolios.
B) When investors employ risk-free borrowing to increase their holdings in a risky investment,the risk of the portfolio increases.
C) If the risky investment has a positive weight,and the graph has a mean return for the risky investment that is larger than the return of the risk-free asset,the slope of this line is negative.
D) The graph of portfolios of two perfectly positively correlated,but risky investments,has the same shape as the graph for a portfolio of a riskless and a risky investment.
Correct Answer:
Verified
Q2: Marginal variance is:
A)the portfolio of risky investments
Q3: Explain a short position and long position.How
Q4: Selling short an investment with a low
Q5: Determine the covariance between the returns of
Q6: Which of the following can be an
Q8: If a portfolio consists of two investments
Q9: Based on the mean-variance analysis,the risk of
Q10: The correlation between two returns:
A)is the covariance
Q11: Explain the concept of standard deviation as
Q12: A portfolio consists of £23 million in
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