A Manager Who Uses the Mean-Variance Theory to Construct an Optimal

question 7

Multiple Choice

A manager who uses the mean-variance theory to construct an optimal portfolio will satisfy

• A) investors with low risk-aversion coefficients.
• B) investors with high risk-aversion coefficients.
• C) investors with moderate risk-aversion coefficients.
• D) all investors regardless of their level of risk aversion.
• E) only clients with whom she has established long-term relationships because she knows their personal preferences.

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Definitions:

Circumstances

The conditions or facts affecting a situation or event, often outside of one's control.

Effective

Producing the intended or desired result in an efficient and successful manner.

Objectives

Specific, measurable, achievable, relevant, and time-bound goals set by an organization or individual to guide actions and measure performance.

Money

A medium of exchange in the form of coins and banknotes; used to facilitate transactions for goods and services.