Multiple Choice
If arbitrage opportunities are to be ruled out, each well-diversified portfolio's expected excess return must be
A) inversely proportional to the risk-free rate.
B) inversely proportional to its standard deviation.
C) proportional to its weight in the market portfolio.
D) proportional to its standard deviation.
E) proportional to its beta coefficient.
Correct Answer:
Verified
Correct Answer:
Verified
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