According to Portfolio Theory All the Following Statements Are True

question 22

Multiple Choice

According to Portfolio Theory all the following statements are true when there is a riskless asset except:

• A) The optimal risky asset portfolio maximizes the Sharpe Measure.
• B) The optimal risky asset portfolio minimizes the risk per unit of return risk premium.
• C) The optimal risky asset portfolio should be bought even by investors who do not want to bear much risk.
• D) The optimal risky asset portfolio should always be mixed with investments in riskless bonds.

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Definitions:

Mental State

The condition of one's mind in terms of thoughts, feelings, and emotions at a given time.

Decision Making

The cognitive process of selecting a course of action from among multiple alternatives, often involving judgment, problem-solving, and considering the potential outcomes.

Pros

The advantages or positive aspects of a situation or decision.

Cons

The arguments, reasons, or factors opposing an idea, decision, or action; the drawbacks or disadvantages.