Markowitz's Main Contribution to Portfolio Theory Is That Risk Is

question 29

Multiple Choice

Markowitz's main contribution to portfolio theory is that risk is:

• A) the same for each type of financial asset.
• B) a function of credit, liquidity, and market factors.
• C) not quantifiable.
• D) influenced more by covariance than variance when portfolios are large.

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Definitions:

Direct Materials

Raw materials that are directly traceable to the production of specific goods or services.

Yards

A measurement unit equal to three feet or 0.9144 meters, often used in expressing lengths or distances.

Factory Overhead Cost Budget

A budget that estimates the cost for each item of factory overhead needed to support budgeted production.

Total Variable Cost

The sum of all costs that vary directly with the level of production, including materials and direct labor.