Which One of the Following Distinguishes a Minimum Variance Portfolio

question 55

Multiple Choice

Which one of the following distinguishes a minimum variance portfolio?

• A)lowest risk portfolio of any possible portfolio given the same securities but in differing proportions
• B)lowest risk portfolio possible given any specified expected rate of return
• C)the zero risk portfolio created by maximizing the asset allocation mix
• D)any portfolio with an expected standard deviation of 9% or less
• E)any portfolio created with securities that are evenly weighted in respect to the asset allocation mix

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Definitions:

Negatively Sloped

Describes a line on a graph that moves downward from left to right, indicating an inverse relationship between two variables.

Total Surplus

The sum of consumer surplus and producer surplus, representing the total benefits to society from the trade of a good or service.

Consumer Surplus

The difference between the maximum price consumers are willing to pay for a good or service and the actual price they pay.

Producer Surplus

The disparity between the price that producers are ready to accept for a product or service and the price they actually obtain.