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Yasmin Guzman
on Nov 03, 2024

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Which statement is not true regarding the market portfolio?

A) It includes all publicly-traded financial assets.
B) It lies on the efficient frontier.
C) All securities in the market portfolio are held in proportion to their market values.
D) It is the tangency point between the capital market line and the indifference curve.
E) All of the options are true.

Market Portfolio

A theoretical portfolio of all assets in the market, with each asset weighted according to its market capitalization.

Efficient Frontier

A concept in modern portfolio theory which represents a set of optimal portfolios that provide the highest expected return for a defined level of risk or the lowest risk for a given level of expected return.

Indifference Curve

A curve connecting all portfolios with the same utility according to their means and standard deviations.

  • Analyze the relevance of the market portfolio, including its properties and composition.
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Louie GibsonNov 04, 2024
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