If an Investor Has a Portfolio That Has Constant Proportions

question 37

Multiple Choice

If an investor has a portfolio that has constant proportions in T-bills and the market portfolio, the portfolio's characteristic line will plot as a line with ___________. If the investor can time bull markets, the characteristic line will plot as a line with ___________.

• A) a positive slope; a negative slope
• B) a negative slope; a positive slope
• C) a constant slope; a negative slope
• D) a negative slope; a constant slope
• E) a constant slope; a positive slope

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Definitions:

Independent Samples

Samples in which the sample values of one group do not depend on the values of another, often used in hypothesis testing to compare two groups.

Normal Populations

Populations that follow a normal distribution, characterized by its bell-shaped curve, where the mean, median, and mode are all equal.

Equal Variances

Assuming that two or more populations have the same variance, often an assumption in statistical tests comparing populations.

Sample Variances

Sample variances refer to the measurement of the variance within a sample from a population, providing an estimate of the population variance.