Which of the following is a TRUE statement? ○ The separation theorem states that the investment decision, (how to construct the portfolio of risky assets), is not separate from the financing decision, (how much should be invested or borrowed in the risk-free asset). ● The tangent portfolio is the risky portfolio on the efficient frontier whose tangent line cuts the horizontal axis at the risk- free rate. ○ The market portfolio is a portfolio that contains some risky securities in the market. O The new (or super) efficient frontier represents the portfolios composed of the risk-free rate and the tangent portfolio that offers the highest expected rate of return for any given level or risk.
Which of the following is a TRUE statement? ○ The separation theorem states that the investment decision, (how to construct the portfolio of risky assets), is not separate from the financing decision, (how much should be invested or borrowed in the risk-free asset). ● The tangent portfolio is the risky portfolio on the efficient frontier whose tangent line cuts the horizontal axis at the risk- free rate. ○ The market portfolio is a portfolio that contains some risky securities in the market. O The new (or super) efficient frontier represents the portfolios composed of the risk-free rate and the tangent portfolio that offers the highest expected rate of return for any given level or risk.
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
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