Your spouse/significant other asks you about the concept of risk and return (oh? Please - this...

Your spouse/significant other asks you about the concept of risk and return (oh? Please - this is a quiz, so bear with me). Which of the following statements would you not want to tell them?

	a.	Modern portfolio theory suggests that investors are rewarded in terms of the risk-return trade-off for holding a diversified portfolio of securities across a variety of asset classes.
	b.	In efficient markets you need to be willing to take higher potential risk for higher potential return.
	c.	Investors that are willing to hold an asset riskier than the risk-free security should be entitled to a market premium.
	d.	There is no risk in investing all your assets into the risk-free Treasury bill.

Solutions

Expert Solution

a) This statement is correct, so I would tell that.

b) This statement is correct, so I would tell that.

c) This statement is not true.

d) This statement is correct, so I would tell that.

jeff jeffy answered 2 years ago

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