The Slope of the Efficient Frontier Is Calculated as Follows $\sigma$

question 84

Multiple Choice

The slope of the efficient frontier is calculated as follows

• A)E(R_portfolio)/E(\(\sigma\)_portfolio)
• B)E(\(\sigma\)_portfolio)/ E(R_portfolio)
• C)\(\Delta\)E(R_portfolio)/\(\Delta\)E(\(\sigma\)_portfolio)
• D)\(\Delta\)E(\(\sigma\)_portfolio)/\(\Delta\)E(R_portfolio)
• E)None of the above

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Definitions:

Gross Investment

The total amount of investment in the economy, including investments in the replacement and acquisition of capital assets before accounting for depreciation.

Depreciation

Depreciation is the accounting process of allocating the cost of a tangible or physical asset over its useful life, reflecting the loss of value over time.

Great Recession

A significant decline in economic activity spread across the economy, lasting more than a few months, typically visible in real GDP, real income, employment, industrial production, and wholesale-retail sales, specifically referring to the global economic downturn that began in 2007 and lasted until 2009.

Real GDP

A measure of a country's economic output adjusted for price changes (inflation or deflation), providing a more accurate reflection of an economy's size and growth rate.