Question
A stock has an average historical return of 11.3% and a standard deviation of 20.2%. Which range of returns would you expect to see approximately
A stock has an average historical return of 11.3% and a standard deviation of 20.2%. Which range of returns would you expect to see approximately 68% (two-third) of the time? Assume the stock return frequency follows the normal distribution curve.
| +4.6% TO +33.8% | ||
| -8.9% TO +31.5% | ||
| -23.8% TO +53.0% | ||
| -3.9% TO +32.5% |
Which of the following statement is TRUE?
| A. | If the correlation coefficient of the two securities is +1, the investment opportunity set will appear as conical shape. | |
| B. | Minimum variance portfolio shows the portfolio with the highest expected return among the investment opportunity set. | |
| C. | Minimum variance portfolio lie in the highest point in respect to the investment opportunity set. | |
| D. | By combining various risky assets, opportunity sets move farther to the southwestern direction. | |
| E. | There are multiple efficient portfolios that can be constructed using the same two securities. |
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