The Optimal Portfolio for a Risk-Averse Investor

question 56

Multiple Choice

The optimal portfolio for a risk-averse investor:

• A) cannot be determined.
• B) occurs at the point of tangency between the highest indifference curve and the highest expected return.
• C) occurs at the point of tangency between the highest indifference curve and the efficient set of portfolios.
• D) occurs at the point of tangency between the highest expected return and lowest-risk efficient portfolio.

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Definitions:

Chronic Pain

A persistent or recurring pain that lasts longer than three months, often significantly affecting an individual’s quality of life.

Acute Pain

Short-term pain that results from tissue damage or other trauma.

Psychosocial

Referring to the interrelation of social factors and individual thought and behavior.

Gate Control Theory

A theory proposing that there are neural "gates" in the spinal cord that control the transmission of pain signals to the brain.