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Consider Two Portfolios

question 6

Essay

Consider two portfolios. Portfolio A has an expected return of 12% and volatility of 11%. Portfolio B has expected return of 9% and volatility of 6%. The interest rate on a riskfree investment is 6% which can be held either long or short). Which of these two risky portfolios is definitely not on the efficient frontier? Show your work for full credit.)


Definitions:

Psychoanalytic Theory

A theory of personality development and therapeutic framework that focuses on unconscious processes influencing behavior, developed by Freud.

Clingingness

The tendency to form overly dependent relationships with others, often stemming from psychological needs or fears of abandonment.

Oral Character

A psychoanalytic concept describing personality traits associated with being fixated at the oral stage of psychological development.

Psychoanalytic Theory

A theory of personality development and therapeutic framework that posits human behavior is influenced by unconscious motives.

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