The expected return of a two-fund portfolio: Answers: (possibly multiple are cor
ID: 3072875 • Letter: T
Question
The expected return of a two-fund portfolio:
Answers: (possibly multiple are correct)
a. will always be lower than the expected return of each of the individual funds.
b. will always be somewhere in between the expected return of each of the individual funds.
c. will always be higher than the expected return of each of the individual funds.
d. will always be higher than the expected return of each of the individual funds if the funds have a negative covariance.
e. will always be lower than the expected return of each of the individual funds if the funds have a negative covariance.
f. will always be somewhere in between the expected return of each of the individual funds if the funds have a negative covariance.
Explanation / Answer
b. will always be somewhere in between the expected return of each of the individual funds.
f. will always be somewhere in between the expected return of each of the individual funds if the funds have a negative covariance.