Which of the following statements is false regarding the portfolio selection problem?
A)The typical objective is to maximize the expected return on investment.
B)The constraints only pertain to risk.
C)Typical applications include banks,mutual funds,investment services,and insurance companies.
D)The problem typically includes both greater-than-or-equal-to and less-than-or-equal-to constraints.
E)The problem can also factor in legal requirements.

Question

Quizplus · Accepted Answer

The false statement is B because the constraints in the portfolio selection problem pertain to both risk and return objectives. The typical objective of the portfolio selection problem is to maximize the expected return subject to a given level of risk or to minimize the risk subject to a given level of expected return. The problem typically includes both greater-than-or-equal-to and less-than-or-equal-to constraints, and can also factor in legal requirements.

Which of the Following Statements Is False Regarding the Portfolio