Which One of the Following Portfolios Cannot Lie on the Efficient

question 28

Multiple Choice

Which one of the following portfolios cannot lie on the efficient frontier as described by Markowitz? $$\begin{array}{l}\begin{array} { r r r } \text { Portfolio }&\text{Expected Return }& \text { Standard Deviation } \\\hline\mathrm { W } & 9 \% & 21 \% \\\mathrm { X } & 5 \% & 7 \% \\\mathrm { Y } & 15 \% & 36 \% \\\mathrm { Z } & 12 \% & 15 \%\end{array}\end{array}$$

• A) Only portfolio W cannot lie on the efficient frontier.
• B) Only portfolio X cannot lie on the efficient frontier.
• C) Only portfolio Y cannot lie on the efficient frontier.
• D) Only portfolio Z cannot lie on the efficient frontier.
• E) Cannot tell from the information given.

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Definitions:

External-Unstable

Characteristics of attributions referring to causes outside oneself that are variable and can change over time.

Self-Fulfilling Prophesy

A prediction that directly or indirectly causes itself to become true, due to the positive feedback between belief and behavior.

Discrimination

The unjust or prejudicial treatment of different categories of people, especially on the grounds of race, age, sex, or disability.

Self-Serving Bias

The common tendency to attribute successes to personal abilities and failures to external factors.