You Are Given a Two Asset Portfolio with a Fixed

question 9

Multiple Choice

You are given a two asset portfolio with a fixed correlation coefficient.If the weights of the two assets are varied the expected portfolio return would be ____ and the expected portfolio standard deviation would be ____.

• A) Nonlinear, elliptical
• B) Nonlinear, circular
• C) Linear, elliptical
• D) Linear, circular
• E) Circular, elliptical

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Definitions:

Ammonia

A compound of nitrogen and hydrogen with the formula NH3, known for its pungent smell and used in various industrial processes.

Valles Marineris

A vast canyon system on the planet Mars, stretching about 4,000 kilometers and known as one of the largest canyon systems in the Solar System.

Kilometers

A unit of measurement equal to 1,000 meters, commonly used to measure distances between geographical locations.

Eroded

The process by which natural forces remove soils, rock, or dissolved material from one location and transport it to another, often leading to changes in landscape and topography.