8 1 Consider a diagram of the efficient frontier The vertical axis is The horizontal axis is , as measured by the 8 2 How many portfolios are on an efficient frontier What is the Markowitz efficient set 8 3 Why do rational investors seek efficient portfolios 8 4 Using the Markowitz analysis, how does an investor select an optimal portfolio 8 5 How is an investors risk aversion indicated in an indifference curve Are all indifference curves upward sloping 8 6 What does it mean to say that combining the efficient frontier with indifference curves matches possibilities with preferences 8 7 With regard to international investing, how has the situation changed in recent years with regard to correlations among the stocks of different countries 8 8 If the correlations among country returns have increased in recent years, should U S investors significantly reduce their positions in foreign securities 8 9 What is meant by the asset allocation decision How important is this decision 8 10 When efficient frontiers are calculated using asset classes, what types of results are generally found 8 11 As we add securities to a portfolio, what happens to the total risk of the portfolio 8 12 How well does diversification work in reducing the risk of a portfolio Are there limits to diversification Do the effects kick in immediately 8 13 Assume you have a portfolio worth $100,000 invested in bonds because you are a conservative investor Is this a sound decision 8 14 Now assume you inherit $25,000 and decide to invest this amount in bonds also, adding the new bonds to your existing $100,000 bond portfolio Is such a decision consistent with the lessons of modern portfolio theory 8 15 What is the difference between traditional beliefs as to the number of securities needed to properly diversify and the subsequent evidence presented by Malkiel and others 8 16 Can gold be used as part of an asset allocation plan If so, how can this be accomplished 8 17 Can a single asset portfolio be efficient 8 18 Can the original Markowitz efficient frontier ever be a straight line

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8.1 Consider a diagram of the efficient frontier. The vertical axis is . The horizontal axis is , as measured by the . 8.2 How

8.1 Consider a diagram of the efficient frontier. The vertical axis is ________. The horizontal axis is ________, as measured by the ________.
8.2 How many portfolios are on an efficient frontier? What is the Markowitz efficient set?
8.3 Why do rational investors seek efficient portfolios?
8.4 Using the Markowitz analysis, how does an investor select an optimal portfolio?
8.5 How is an investors risk aversion indicated in an indifference curve? Are all indifference curves upward sloping?
8.6 What does it mean to say that combining the efficient frontier with indifference curves matches possibilities with preferences?
8.7 With regard to international investing, how has the situation changed in recent years with regard to correlations among the stocks of different countries?
8.8 If the correlations among country returns have increased in recent years, should U.S. investors significantly reduce their positions in foreign securities?
8.9 What is meant by the asset allocation decision? How important is this decision?
8.10 When efficient frontiers are calculated using asset classes, what types of results are generally found?
8.11 As we add securities to a portfolio, what happens to the total risk of the portfolio?
8.12 How well does diversification work in reducing the risk of a portfolio? Are there limits to diversification? Do the effects kick in immediately?
8.13 Assume you have a portfolio worth $100,000 invested in bonds because you are a conservative investor. Is this a sound decision?
8.14 Now assume you inherit $25,000 and decide to invest this amount in bonds also, adding the new bonds to your existing $100,000 bond portfolio. Is such a decision consistent with the lessons of modern portfolio theory?
8.15 What is the difference between traditional beliefs as to the number of securities needed to properly diversify and the subsequent evidence presented by Malkiel and others?
8.16 Can gold be used as part of an asset allocation plan? If so, how can this be accomplished?
8.17 Can a single asset portfolio be efficient?
8.18 Can the original Markowitz efficient frontier ever be a straight line?