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1) True or False, if False, why? i. An efficient portfolio can contain assets which themselves do not lie on the efficient frontier. ii. Diversification

1) True or False, if False, why?

i. An efficient portfolio can contain assets which themselves do not lie on the efficient frontier.

ii. Diversification cannot work if all stocks contained in the portfolio have identical amount of risks.

iii. Increasing absolute risk aversion implies increasing relative risk aversion.

iv, It is possible for the risk/return profile of individual assets to lie outside (i.e. left of) the efficient frontier.

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