If an Investor Has a Portfolio That Has Constant Proportions

question 37

Multiple Choice

If an investor has a portfolio that has constant proportions in T-bills and the market portfolio, the portfolio's characteristic line will plot as a line with ___________. If the investor can time bull markets, the characteristic line will plot as a line with ___________.

• A) a positive slope; a negative slope
• B) a negative slope; a positive slope
• C) a constant slope; a negative slope
• D) a negative slope; a constant slope
• E) a constant slope; a positive slope

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Definitions:

External Validity

The judgment that a research finding can be generalized to other people, in other settings, at other times.

Independent Variable

In an experimental setting, the variable that is manipulated or changed to examine its effect on a dependent variable.

Causal Order

The sequence in which cause and effect events occur, indicating a relationship where one action or event directly influences another.

Experimental Method

A research methodology that involves manipulating one variable to determine if changes in one variable cause changes in another variable.