The Presence of a Risk-Free Asset Enables the Investor to

question 8

Multiple Choice

The presence of a risk-free asset enables the investor to

• A)invest in the market portfolio and find an interior portfolio using quadratic programming.
• B)invest in the market portfolio and borrow or lend at the risk-free rate.
• C)borrow or lend at the risk-free rate and form portfolios having greater Sharpe ratios.
• D)form portfolios having greater Sharpe ratios.

---

Definitions:

Defensive Behaviour

Actions or reactions aimed at protecting oneself from perceived threats, criticism, or blame, often at the expense of productive communication.

Overconforming

Exceeding the norms or standards in a given context, often to garner approval or prevent criticism.

Ingratiation

A social influence technique aimed at making oneself more likable to others through flattery or other forms of agreement.

Strategic Contingencies

Key events, conditions, or variables that significantly impact the strategy and success of an organization, necessitating adaptive measures.