QUESTION 14 There are only 3 assets to invest in, all being risky. AAPL has an expected return of 10% and volatility of 15%. MSFT has an expected return of 12% and volatility of 18%. TSLA has an expected return of 20% and volatility of 30%. Investors can form risky portfolios out of these 3 assets. Which one of the following statements is correct? feasible risky On the expected return-volatility space, the set of portfolios is a curve that does not go through any of the 3 risky assets. 100% invested in MSFT is an inefficient portfolio. 100% invested in TSLA is an efficient portfolio. On the expected return-volatility space, the set of all feasible risky portfolios is a curve that goes through the 3 risky assets.
QUESTION 14 There are only 3 assets to invest in, all being risky. AAPL has an expected return of 10% and volatility of 15%. MSFT has an expected return of 12% and volatility of 18%. TSLA has an expected return of 20% and volatility of 30%. Investors can form risky portfolios out of these 3 assets. Which one of the following statements is correct? feasible risky On the expected return-volatility space, the set of portfolios is a curve that does not go through any of the 3 risky assets. 100% invested in MSFT is an inefficient portfolio. 100% invested in TSLA is an efficient portfolio. On the expected return-volatility space, the set of all feasible risky portfolios is a curve that goes through the 3 risky assets.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:QUESTION 14
There are only 3 assets to invest in, all being risky. AAPL has an expected
return of 10% and volatility of 15%. MSFT has an expected return of 12% and
volatility of 18%. TSLA has an expected return of 20% and volatility of 30%.
Investors can form risky portfolios out of these 3 assets. Which one of the
following statements is correct?
On the expected return-volatility space, the set of all feasible risky
portfolios is a curve that does not go through any of the 3 risky assets.
100% invested in MSFT is an inefficient portfolio.
100% invested in TSLA is an efficient portfolio.
On the expected return-volatility space, the set of all feasible risky
portfolios is a curve that goes through the 3 risky assets.
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