The Investor's Optimal Portfolio Will Include an Investment in the Risky

question 1

Multiple Choice

The investor's optimal portfolio will include an investment in the risky portfolio and _______ at the risk free rate.

• A) borrowing
• B) lending
• C) borrowing or lending
• D) none

---

Definitions:

Unrealised Profit

Profit that results from an increase in value of an asset that has not yet been sold and thus has not generated actual cash inflow.

Intragroup Sale

Transactions occurring between entities within the same group or conglomerate, often scrutinized for transfer pricing and tax implications.

Unrealised Profit

Unrealised profit refers to profits that have been generated on paper through an investment's increased value but have not yet been realized through a sale.

Inventories

Assets held for sale in the ordinary course of business, in the process of production for such sale, or in the form of materials to be consumed in the production process.