Multiple Choice
You own a portfolio comprised of 4 stocks and the economy has 3 possible states. Assume you invest your portfolio in a manner that results in an expected rate of return of 7.5%, regardless of the economic state. Given this, what must be value of the portfolio's variance be?
A) negative, but not −1
B) −1.0
C) 0
D) 1.0
E) positive, but not +1
Correct Answer:
Verified
Correct Answer:
Verified
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