The Line Representing All Combinations of Portfolio Expected Returns and Standard

question 75

Multiple Choice

The line representing all combinations of portfolio expected returns and standard deviations that can be constructed from two available assets is called the

• A) risk/reward tradeoff line.
• B) capital allocation line.
• C) efficient frontier.
• D) portfolio opportunity set.
• E) Security Market Line.

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Definitions:

Unrealized Gain

An increase in the value of an asset that has not been sold, hence the gain is not reflected in the financial statements as actual profit.

Equity Method

An accounting technique used by a company to record its investment in another company based on the profit or loss and changes in the investee's equity.

Dividend Income

Earnings received from owning shares in a company, typically distributed from the company's profits.

Dividend Income

Income received by shareholders from the profits distributed by a company, usually in the form of cash payments.