Answered: represents the efficient frontier

Business

Finance

represents the efficient frontier

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter6: Risk And Return

Section: Chapter Questions

Problem 1Q

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Concept explainers

Portfolio Management

Portfolio management is the process by which an investor decides that how the person will invest in a variety of assets in order to get a desired return in the future. A portfolio means a pool of assets that includes securities, bonds, and other investment instruments which helps in risk minimization of the money that has been invested. In other words, it can be said that a portfolio means a combination of assets in which an investor decides to invest their money in order to get a lump sum return in the future or even a series of cash flow that the person is expecting at the end of their job life.

Question

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Which one of below best represents the efficient frontier

A) the portion of the minimum-variance portfolio that lies above the global minimum variance portfolio.

B) the portion of the minimum-variance portfolio that represents the highest standard deviations.

C) the portion of the minimum-variance portfolio that includes the portfolios with the lowest standard deviation.

D) the set of portfolios that have zero standard deviation.

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