Portfolio Test 1 question 27

ardas2u2005
Posts: 1
Joined: Sat Feb 25, 2017 6:29 am

Portfolio Test 1 question 27

Postby ardas2u2005 » Tue Jun 27, 2017 6:41 am

The following is from Portfolio test one question 27.
It seems to me incorrect. Could you please check?

Which of the following is below the Markowitz efficient frontier?
Choose one answer.
a. Portfolio A, Expected Return 15%, Expected S.D. 26% Incorrect
b. Portfolio B, Expected Return18%, Expected S.D. 32% Correct
c. Portfolio C, Expected Return12%, Expected S.D. 18% Incorrect
The correct answer is B.
15%/26% = 0.5769, 12%/18% = 0.6667, 18%/32% = 0.5625 and it is lowest.
Incorrect
Marks for this submission: 0/1.

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edupristine
Finance Junkie
Posts: 780
Joined: Wed Apr 09, 2014 6:28 am

Re: Portfolio Test 1 question 27

Postby edupristine » Tue Jul 18, 2017 8:41 pm

The Correct answer is Portfolio A (15% return with SD of 26%). We can plot the three portfolios and identify that B and C portfolios lie on the line, while A lies below the line.


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