The curve below represents all portfolios that maximize returns for the risk assumed. The point marked by X is considered sub-optimal because:

Q: Optimal portfolios can be obtained without diversification. True or false?

A: optimal portfolio are the one that minimises the risk for given level of return.

Q: Find the variance &Standard deveation of the portfolio

A: Excel Spreadsheet:

Q: Define beta risk

A: The portfolio beta is a measure of the portfolio’s volatility. It measures how the stock moves in…

Q: Markowitz theory indicates to create and construct a portfolio of assets to maximize returns within…

A: The portfolio which is designed as per the investor’s preferences about the expected return and the…

Q: Given the indifference curves above, which of the following statements isCORRECT? A) The investor…

A: Indifference curve: It could be a graph appearing a combination of two items that give rise to…

Q: Portfolio standard deviation is negatively associated with the covariance among the assets in the…

A: The portfolio standard deviation is the financial measure which computes the investment risk and…

Q: what is a zero cost strategy in portfolios

A: A zero cost strategy is a business strategy or decision that doesn’t have nay expenses. It doesn’t…

Q: VaR can be estimated on portfolios as well as single assets. Select one: True False

A: VAR is a measure of risk of investment which measures the maximum loss which an investment may…

Q: In what circumstances would you use one of the available risk measurements used in Modern Portfolio…

A: Modern portfolio theory refers to the theory of investment that allows the investors for…

Q: The portfolio opportunity set (i.e., all possible combinations) between two uncorrelated assets is…

A: Portfolio opportunity sets play a pivotal role in the field of finance, providing a graphical…

Q: 1. The diversifiable risk of a portfolio: a. Is correlated with systematic risk. b. Can be made…

A: Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: Given the capital allocation line, an investor's optimal complete portfolio is the portfolio that A)…

A: Capital Allocation Line (or CAL) refers to that line in finance that shows risk and reward profile…

Q: What is the expected return on a portfolio? How can the expected return on a portfolio be…

A:

Q: Along the CAL you can choose different combinations from the same risky asset and risk-free asset -…

A: Capital Allocation Line is a graphical representation of a combination of risk free asset and risky…

Q: Describe the relation between Risk and Returns that was introduced by Harry Markowitz

A: Modern portfolio theory, or MPT, is referred to as the method for portfolio management for reducing…

Q: ch of the folowing models CANNT be applied to measure the Value-at-Risk of a cash-flow portfolio?…

A: VaR is the value at risk that how much money of the portfolio is at risk and how much money…

Q: Markowitz theory indicates to create and construct a portfolio of assets to maximize returns within…

A: Efficient frontier curve tells the set of portfolios which offer the highest rate of return with the…

Q: Can the standard deviation of a portfolio be zero? Explain your answer.

A: Standard deviation of a portfolio measures the volatility of returns,i.e. how much the returns…

Q: Which of the following portfolios achieves the highest Sharpe ratio? (check all that applies)…

A: Sharpe ratio of portfolio indicates the how much is the performance of portfolio based on the the…

Q: xplain the differences between an ‘efficient portfolio’ and an ‘efficient market'

A: Efficiency in financeThe concept of efficiency in finance examines how resources, whether in the…

Q: Draw an efficient frontier and show minimum variance portfolio (MVP) on that curve.

A:

Q: Is the portfolio risk the weighted average of the variance or covariance?

A: The concept of variance which states the deviation from the total average or which is said to be the…

Q: According to modern portfolio theory, pair-wise covariance is more important to total portfolio risk…

A: According to modern portfolio theory, every investment's risk and return characteristics should not…

Q: ow does standard deviation and variance affect portfolio risk, more so than expected return?

A: The standard deviation is  statistical  m ea s u r e of the amount of variation from the average or…

Q: Explain the impact and significance Separation Theorem has when chosing the optimal portfolio.

A: Fisher's separation theorem states that the primary goal of any corporation is to increase its…

Q: Portfolios that offer the highest expected return for a given variance (or standard deviation) are…

A: Efficient portfolios play a crucial role in investment strategies, aiming to strike an optimal…