Consider Two Perfectly Negatively Correlated Risky Securities, K and L

question 19

Multiple Choice

Consider two perfectly negatively correlated risky securities, K and L. K has an expected rate of return of 13% and a standard deviation of 21%. L has an expected rate of return of 10% and a standard deviation of 15%. The weights of K and L in the global minimum variance portfolio are _____ and _____, respectively.

• A) 0.2411; 0.7261
• B) 0.5000; 0.5000
• C) 0.4167; 0.5833
• D) 0.4532; 0.5511
• E) 0.7665; 0.2488

Recognize the environmental impacts of technological and scientific advancements, specifically relating to global warming, acid rain, and genetic pollution.

Identify the role of various types of organizations and governments in supporting or regulating technological development and environmental protection.

Understand the historical development of significant technologies, including nuclear energy.

Grasp the ethical considerations and potential conflicts arising from technological advancements and environmental conservation.

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Definitions:

Benchmark Portfolio

A standard or reference by which the performance of a portfolio can be measured or judged.

Passive Strategy

An investment strategy involving minimal buying and selling actions, typically focused on long-term investment in index funds or Exchange-Traded Funds (ETFs).

Steps

A sequence of actions or procedures taken in order to achieve a particular end.

Jensen Portfolio Evaluation Measure

The Jensen Portfolio Evaluation Measure is a performance metric that assesses the return of an investment portfolio while adjusting for risk, comparing it to the expected return of the market with a given risk level.