#18

Explain what the following sentence means: The market portfolio is a fence that protects the sheep from the wolves, but nothing can protect the sheep from themselves. (Select the best choice below.) A. By investing in the market portfolio investors (the wolves) can protect themselves from being exploited by investors with better information (the sheep) than they have themselves. By choosing not to invest in the market portfolio, investors expose themselves to being exploited. If they do this because of overconfidence they will lose money. Hence, the sheep have themselves to blame for this loss. B. By investing in the market portfolio investors (the wolves) can protect themselves from being exploited by investors with better information (the sheep) than they have themselves. By choosing not to invest in the market portfolio, investors expose themselves to being exploited. If they do this because of overconfidence they will lose money. Hence, the wolves have themselves to blame for this loss. C. By investing in the market portfolio investors (the sheep) can protect themselves from being exploited by investors with better information (the wolves) than they have themselves. By choosing not to invest in the market portfolio, investors expose themselves to being exploited. If they do this because of overconfidence they will lose money. Hence, the wolves have themselves to blame for this loss. D. By investing in the market portfolio investors (the sheep) can protect themselves from being exploited by investors with better information (the wolves) than they have themselves. By choosing not to invest in the market portfolio, investors expose themselves to being exploited. If they do this because of overconfidence they will lose money. Hence, the sheep have themselves to blame for this loss