Use the table for the question(s)below.
Consider the following covariances between securities:
-Which of the following statements is FALSE?
A)We say a portfolio is an efficient portfolio whenever it is possible to find another portfolio that is better in terms of both expected return and volatility.
B)We can rule out inefficient portfolios because they represent inferior investment choices.
C)The volatility of the portfolio will differ,depending on the correlation between the securities in the portfolio.
D)Correlation has no effect on the expected return on a portfolio.

Question

Use the table for the question(s)below.
Consider the following covariances between securities: 
-Which of the following statements is FALSE?
A)We say a portfolio is an efficient portfolio whenever it is possible to find another portfolio that is better in terms of both expected return and volatility. 
B)We can rule out inefficient portfolios because they represent inferior investment choices. 
C)The volatility of the portfolio will differ,depending on the correlation between the securities in the portfolio. 
D)Correlation has no effect on the expected return on a portfolio.

Quizplus · Accepted Answer

A)We say a portfolio is an efficient portfolio whenever it is not possible to find another portfolio that is better in terms of both expected return and volatility.

Use the Table for the Question(s)below