According to modern portfolio theory,the _______ the degree of systematic risk,the _______ should be the expected return.
A) smaller; greater.
B) greater; greater.
C) smaller; smaller.
D) greater; smaller.

Question

Quizplus · Accepted Answer

According to modern portfolio theory, the greater the degree of systematic risk, the greater should be the expected return. This is because investors need to be compensated for taking on higher risk with the potential for higher returns.

According to Modern Portfolio Theory,the _______ the Degree of Systematic