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It Is Not Possible to Earn a Return That Is

question 28

True/False

It is not possible to earn a return that is above the efficient frontier without the existence of a risk-free asset or some other asset that is uncorrelated with your portfolio assets.


Definitions:

Normal Probability Distribution

A bell-shaped probability distribution characterized by its mean and standard deviation, describing how random values are spread or dispersed.

Parameters

Quantitative values that define the behavior and characteristics of a model or function.

Classical Definition

The Classical Definition, often referred to in the context of probability, is an approach where the probability of an event is calculated by dividing the number of favorable outcomes by the total number of equally likely outcomes.

Probability

Probability measures the likelihood of a particular event occurring, expressed as a number between 0 and 1, where 1 represents certainty.

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