There are only 2 assets to invest in, both being risky. AAPL has an expected return of 10% and volatility of 15%. MSFT has an expected return of 12% and volatility of 18%. Which one of the following statements is correct? On the expected return-volatility space, the set of all feasible risky portfolios is a straight line. On the expected return-volatility space, the set of all feasible risky portfolios is a curve that does not go through any of the 2 risky assets. 100% invested in MSFT is an efficient portfolio. O100% invested in AAPL is an efficient portfolio.
There are only 2 assets to invest in, both being risky. AAPL has an expected return of 10% and volatility of 15%. MSFT has an expected return of 12% and volatility of 18%. Which one of the following statements is correct? On the expected return-volatility space, the set of all feasible risky portfolios is a straight line. On the expected return-volatility space, the set of all feasible risky portfolios is a curve that does not go through any of the 2 risky assets. 100% invested in MSFT is an efficient portfolio. O100% invested in AAPL is an efficient portfolio.
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter2: Risk And Return: Part I
Section: Chapter Questions
Problem 3Q: Security A has an expected return of 7%, a standard deviation of returns of 35%, a correlation...
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![QUESTION 4
There are only 2 assets to invest in, both being risky. AAPL has an expected
return of 10% and volatility of 15%. MSFT has an expected return of 12% and
volatility of 18%. Which one of the following statements is correct?
On the expected return-volatility space, the set of all feasible risky
portfolios is a straight line.
On the expected return-volatility space, the set of all feasible risky
portfolios is a curve that does not go through any of the 2 risky assets.
100% invested in MSFT is an efficient portfolio.
100% invested in AAPL is an efficient portfolio.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F3966b9a7-fe71-44cf-b953-e8752bb97164%2F76c0d4ec-6a3a-4080-8ee3-5afe612e4c4d%2Fn31f6lc_processed.jpeg&w=3840&q=75)
Transcribed Image Text:QUESTION 4
There are only 2 assets to invest in, both being risky. AAPL has an expected
return of 10% and volatility of 15%. MSFT has an expected return of 12% and
volatility of 18%. Which one of the following statements is correct?
On the expected return-volatility space, the set of all feasible risky
portfolios is a straight line.
On the expected return-volatility space, the set of all feasible risky
portfolios is a curve that does not go through any of the 2 risky assets.
100% invested in MSFT is an efficient portfolio.
100% invested in AAPL is an efficient portfolio.
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