A Zero-Investment Portfolio with a Positive Expected Return Arises When

question 20

Multiple Choice

A zero-investment portfolio with a positive expected return arises when

• A) an investor has downside risk only.
• B) the law of prices is not violated.
• C) the opportunity set is not tangent to the capital-allocation line.
• D) a risk-free arbitrage opportunity exists.

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Definitions:

Central Nervous System

The brain and spinal cord.

Sympathetic Activity

Part of the autonomic nervous system responsible for the body's 'fight or flight' response, increasing heart rate, blood pressure, and energy supplies.

Overcrowding

A condition where too many people occupy a space, leading to a sense of congestion and potentially contributing to stress and health problems.

Psychological Problems

Mental health issues or disorders that affect a person's thinking, feeling, mood, and behavior.