In constructing Markowitz efficient portfolios it is assumed that:
A) An investor's decision is affected by the expected return and risk.
B) Investors are risk averse.
C) Investors seek to achieve the highest expected return for a given level of risk.
D) a and b only.
E) All of the above.

Question

Quizplus · Accepted Answer

Markowitz's portfolio theory assumes that investors consider both expected return and risk in their investment decisions (A), are risk averse (B), and seek to maximize their expected return for a given level of risk (C), making all of the statements correct.

In Constructing Markowitz Efficient Portfolios It Is Assumed That