Which One of These Statements Is Correct Regarding a Portfolio

question 9

Multiple Choice

Which one of these statements is correct regarding a portfolio of two risky securities?

• A)Both the rate of return and the standard deviation of a portfolio can be changed by changing the portfolio weights.
• B)The opportunity set is represented by a forward bending curve when expected returns are graphed against standard deviation.
• C)Diversification occurs when the correlation between two securities is +1.
• D)The standard deviation of a portfolio cannot be lower than the weighted average standard deviation of the securities held within the portfolio.
• E)The minimum variance portfolio of two stocks also represents the portfolio's highest possible rate of return.

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Miles to the Gallon

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Correct Figure

Accurate numerical representation or data that correctly reflects a specified measurement, value, or calculation.

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