You Are Graphing the Portfolio Expected Return Against the Portfolio

question 49

Multiple Choice

You are graphing the portfolio expected return against the portfolio standard deviation for a portfolio consisting of two securities. Which one of the following statements is correct regarding this graph?

• A)Risk-taking investors should select the minimum variance portfolio.
• B)Risk-averse investors should select the portfolio with the lowest rate of return.
• C)Some portfolios will be efficient while others will not.
• D)The minimum variance portfolio will have the lowest portfolio expected return of any of the possible portfolios.
• E)All possible portfolios will graph as efficient portfolios.

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Definitions:

Personality Traits

Persistent traits that define how a person acts, including qualities like openness, conscientiousness, extraversion, agreeableness, and neuroticism.

Cognitive Ability

The capacity to perform mental processes such as learning, reasoning, problem-solving, and memory.

Dark Triad Traits

A set of three personality traits: narcissism, Machiavellianism, and psychopathy, which are associated with a manipulative, self-centered, and sometimes malevolent disposition.

Gaining Power

The process of acquiring increased control or influence over others or oneself, often involving social, political, or personal advancement.