A Zero-Investment Portfolio with a Positive Expected Return Arises When

question 74

Multiple Choice

A zero-investment portfolio with a positive expected return arises when _________.

• A)an investor has downside risk only
• B)the law of prices is not violated
• C)the opportunity set is not tangent to the capital allocation line
• D)a risk-free arbitrage opportunity exists
• E)none of the above

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Definitions:

Loyalists

Individuals, especially during the American Revolutionary War, who remained loyal to the British Crown and opposed the independence movement.

Western Hemisphere

The half of Earth that lies west of the Prime Meridian and east of the Antimeridian, including the Americas.

Treaty of Paris

The agreement signed in 1783 that ended the American Revolutionary War, recognizing the independence of the United States.

Native Americans

Indigenous peoples of the Americas, encompassing a wide range of cultures, languages, and histories prior to European colonization.