Which One of the Following Is the Portfolio That Maximizes

question 25

Multiple Choice

Which one of the following is the portfolio that maximizes the Sharpe ratio?

• A) the one below the minimum-variance-efficient frontier
• B) the one that lies on the minimum-variance-efficient frontier
• C) the one above the minimum-variance-efficient frontier
• D) the one that lies on the vertical axis of the minimum-variance-efficient frontier

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Definitions:

Probability

A statistical measure quantifying the chance that an event will occur, evaluated as a value between 0 (never occurs) and 1 (always occurs).

Ace

The playing card with a single symbol on it, often considered the highest or lowest card in many card games.

Political Affiliation

An individual's formal association or identification with a particular political party or stance.

Raising Taxes

The act of increasing the financial charges imposed by the government on individuals' income, corporate profits, or transactions.