A Portfolio Is Efficient If No Other Asset or Portfolios

question 42

True/False

A portfolio is efficient if no other asset or portfolios offer higher expected return with the same (or lower) risk or lower risk with the same (or higher) expected return.

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Definitions:

Accumulated Amount

The total sum that results from adding together various quantities, often referring to interest added to principal over time.

Investment

Allocating assets or capital with the aim of increasing value over a period, often involving some degree of risk.

Compounded Annually

The process where interest is calculated on the principal sum of an investment or loan once a year.

Savings Plan

A strategy designed to help individuals allocate a portion of their income for future use, typically involving deposit accounts or investments.