The Separation Principle States That an Investor Will

question 25

Multiple Choice

The separation principle states that an investor will

• A)choose any efficient portfolio and invest some amount in the riskless asset to generate the expected return.
• B)never choose to invest in the riskless asset because the expected return on the riskless asset is lower over time.
• C)invest only in the riskless asset and tangency portfolio,choosing the weights of each based on his/her individual risk tolerance.
• D)randomly select any efficient portfolio.
• E)select a portfolio based solely on his/her desired rate of return while ignoring the associated risks of their selection.

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Definitions:

Progress Notes

Documentation in a medical record that tracks a patient's clinical status and achievements during the course of hospitalization or over the course of outpatient care.

Immunization Records

Official documents detailing the vaccinations a person has received, often required for school entry, employment in certain fields, or travel.

Index Identifier

A unique identifier or a key used to access or reference data within an index or database more efficiently.

Indexing

A system of cross-referencing information contained in office files so that the data may be searched using different characteristics as the query term; the second step in filing.