1- There are only 3 assets to invest in, all being risky. AAPL has an expected return of 10% and volatility of 15%. MSFT has an expected return of 12% and volatility of 18%. TSLA has an expected return of 20% and volatility of 30%. Investors can form risky portfolios out of these 3 assets. Which one of the following statements is correct?

100% invested in TSLA is an efficient portfolio.

100% invested in MSFT is an inefficient portfolio.

On the expected return-volatility space, the set of all feasible risky portfolios is a curve that does not go through any of the 3 risky assets.

On the expected return-volatility space, the set of all feasible risky portfolios is a curve that goes through the 3 risky assets.

2-

Which of the following correlation coefficients will produce the most diversification benefits?

-0.5

-0.3

0

1

3-

Which of the following statements is correct, according to portfolio theory?

The optimal risky portfolio is one with the highest expected return.

All investors will invest in the same optimal complete portfolio.

An investors risk aversion level should determine the capital allocation to the risky portfolio.

An investors risk aversion level should determine the optimal risky portfolio