An Efficient Set of Portfolios Is Comprised Of

question 39

Multiple Choice

An efficient set of portfolios is comprised of:

• A)a complete opportunity set.
• B)the portion of the opportunity set located below the minimum variance portfolio.
• C)only the minimum variance portfolio.
• D)the dominant portion of the opportunity set.
• E)only the maximum return portfolio.

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Definitions:

Disposable Income

Net funds allocated to households for their spending and saving post the application of income taxes.

Consumption

Consumption is the act of using goods and services by households or individuals.

MPS

Marginal Propensity to Save, expressing the portion of additional income that a household saves rather than spends.

Disposable Income

The amount of money that households have available for spending and saving after income taxes have been accounted for. It is a key indicator of economic health and consumer spending.