The expected return of the risky-asset portfolio with minimum variance is _________. -the market rate of...
The expected return of the risky-asset portfolio with minimum variance is _________.
-the market rate of return
-the risk-free rate
-zero
-The answer cannot be determined from the information given.
Homework Answers
The portfolios that have the lowest standard deviation with a given expected return are known as minimum-variance portfolios. They make up the minimum-variance frontier.
The efficient frontier shows investors the best possible return that they can expect from their portfolio given the level of risk they are willing to accept. It is the basis of the modern portfolio theory. It consists of many securities, some which move in sync and some that move in the opposite direction. The lower the covariance of the securities, the lower will be the risk. It also represents the maximum level of return for its level of risk.
Hence, the answer is option d.
In case of any query, kindly comment on the solution
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The expected return of the risky-asset portfolio with minimum
variance is _________.
-the market rate of...
You invest $100 in a risky asset with an expected rate of return of 0.11 and...
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Note: there is also a risk free asset F whos expected return is
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You invest $100 in a risky asset with an expected rate of return of 0.11 and...
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Note: there is also a risk free asset F whos expected return is
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