The Measure of Risk Most Often Associated with the Markowitz

question 27

Multiple Choice

The measure of risk most often associated with the Markowitz portfolio model is the

• A)expected return of the portfolio.
• B)annual interest on the portfolio.
• C)variance of the portfolio's return.
• D)number of investments listed in the portfolio.

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Definitions:

Fixed

Typically refers to costs or assets that remain constant and do not vary with the level of activity or production.

Linear Relationship

A direct relationship between two variables that can be represented graphically as a straight line, indicating consistent proportionality.

Relevant Range

The range of activity within which assumptions about variable and fixed cost behavior are valid.

Activity Level

The volume of production or the degree of activity in a business operation, which can affect variable costs.