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The following diagram shows the investment opportunity set for portfolios containing stocks A and B, with Point A on the graph representing a portfolio with
The following diagram shows the investment opportunity set for portfolios containing stocks A and B, with Point A on the graph representing a portfolio with 100% in stock A and Point B representing a portfolio with 100% in stock B. Use the diagram to answer the following true or false questions. 9.00% 8.00% 7.00% 6.00% w 5.00% Portfolio Expected Return 4.00% 3.00% 2.00% 1.00% 0.00% 0.00% 0.50% 2.50% 3.00% 1.00% 1.50% 2.00% Portfolio Standard Deviation If an investor decides to shift their portfolio from x to y, that entails moving a greater portion of their investment out of Asset A and into Asset B. True False Questions 17-20 refer to the following table of information about the returns (in percentage form) to an investment in A Port and the Market Index over the first six months of the year. Year 1 Market 10 5 2 A Stock 4 2 7 6 1 3 16 4 14 5 5 Average 4 10 Variance 5.2 20.4 Which is closest to the market beta of the investment A Stock? -1.5 a -0.5 0.5 O 1.5 The following diagram shows the investment opportunity set for portfolios containing stocks A and B with Point A on the graph representing a portfolio with 100% in stock A and Point B representing a portfolio with 100% in stock B. Use the diagram to answer the following true or false questions. 9.00% A 8.00% 7.00% 6.00% W 5.00% Portfolio Expected Return 4.00 B 3.00% 2.00% 100% 0.00% 0.00% 0.50% 2.50% 3.00% 100% 1.50% 2.00% Portfolio Standard Deviation If an investor decides to shift their portfolio from x to y, that entails moving a greater portion of their investment out of Asset A and into Asset B. True False
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