The Budget Line in Portfolio Analysis Shows That

question 94

Multiple Choice

The budget line in portfolio analysis shows that:

• A) the expected return on a portfolio increases as the standard deviation of that return increases.
• B) the expected return on a portfolio increases as the standard deviation of that return decreases.
• C) the expected return on a portfolio is constant.
• D) the standard deviation of a portfolio is constant.
• E) a riskless portfolio will earn a zero return.

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Definitions:

Times A Day

A frequency measure indicating the number of times an event occurs within a single day.

Inferential Statistics

A branch of statistics that uses a random sample of data taken from a population to describe and make inferences about that population.

Descriptive Statistics

Statistical methods that summarize and describe the features of a data set, including measures of central tendency and variability.

Hypotheses

Proposed explanations made on the basis of limited evidence as a starting point for further investigation, often tested statistically.