Which One of the Following Portfolios Cannot Lie on the Efficient

question 40

Multiple Choice

Which one of the following portfolios cannot lie on the efficient frontier as described by Markowitz?

• A)Only portfolio W cannot lie on the efficient frontier.
• B)Only portfolio X cannot lie on the efficient frontier.
• C)Only portfolio Y cannot lie on the efficient frontier.
• D)Only portfolio Z cannot lie on the efficient frontier.

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Definitions:

Bonds Dated

The date at which the bond is issued, establishing when interest payments will start to accrue and when the bond becomes mature for repayment.

Fair Value Method

An accounting approach that estimates the price to sell an asset or settle a liability, based on current market conditions.

Short-term Investments

Investments that are easily convertible into cash, typically within five years or less, used to generate income on surplus funds.

Recognition

The formal acknowledgment in accounting that a transaction or event has occurred and should be recorded in the financial statements.