Question
Are the following statements true or false? Briefly explain your answers. If the expected return on stocks is higher than the return on the risk-free
Are the following statements true or false? Briefly explain your answers.
If the expected return on stocks is higher than the return on the risk-free asset, a risk-averse mean-variance investor will choose to hold some stocks even if stocks returns have a very high (but finite) variance. [Hint: Optimal weight?] (5 marks)
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Entrepreneurial Financial Management An Applied Approach
Authors: Jeffrey R Cornwall, David O Vang, Jean M Hartman
5th Edition
0367335417, 978-0367335410
