A Portfolio Is Efficient If and Only If ________ of Every

question 26

Multiple Choice

A portfolio is efficient if and only if ________ of every available security equals its ________.

• A) the required return; expected return
• B) the realized return; expected return
• C) the expected return; required return
• D) the required return; realized return

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Definitions:

Presidential Election

A formal decision-making process by which a country's citizens select the President, the head of the executive branch of government.

Overconfidence

The tendency to overestimate the accuracy of one’s knowledge and judgments.

Hindsight Bias

The habit of assuming, once an outcome is known, that it was predictable beforehand.

Emotional Instability

A characteristic of individuals who experience rapid, intense emotional changes often in response to events that would not typically provoke such strong reactions.