Consider a portfolio that consists of all of the risky assets in the economy,held in proportion to their existing quantities.This portfolio is
A) a risk-free asset.
B) the only asset that a risk-averse investor chooses to hold.
C) a market portfolio.
D) in the center of the set of all risky assets.

Question

Quizplus · Accepted Answer

This portfolio is known as a market portfolio. It is the portfolio that contains all of the risky assets in the economy held in proportion to their existing quantities. It is considered to be the most diversified portfolio and represents the systemic risk of the entire market. Investors who want to hold a diversified portfolio will choose to invest in the market portfolio.

Consider a Portfolio That Consists of All of the Risky