The Slope of the Efficient Frontier Is Calculated as Follows $\sigma$

question 101

Multiple Choice

The slope of the efficient frontier is calculated as follows

• A) E(R_portfolio)/E( \(\sigma\)portfolio)
• B) E( \(\sigma\)portfolio)/ E(R_portfolio)
• C) \(\Delta\)E(R_portfolio)/\(\Delta\)E( \(\sigma\)portfolio)
• D) \(\Delta\)E( \(\sigma\)portfolio)/\(\Delta\)E(R_portfolio)
• E) None of the above

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Definitions:

Business Fluctuations

Variations in the growth rate of an economy over time, including periods of expansion and contraction.

Money Supply

The overall volume of fiscal assets in an economy, which includes cash, coins, and amounts in checking and savings accounts, at a certain time.

Rational Expectations

An economic theory suggesting that individuals make predictions about future economic events using all available information in an unbiased and informed manner.

Discretionary Policies

Economic policies based on the judgment and decisions of policymakers, as opposed to set rules or formulas, often involving changes in government spending or taxation.