Suppose you are to form an efficient frontier with four risky securities A, B, C, and D. Which one of the securities definitely cannot be on the efficient frontier? Hint: answering this problem does not require calculation. It may help you see if you plot the expected returns against the standard deviations. Expected Standard Security Return Deviation A 9% 21% B 5% 7% C 15% 36% D 12% 15%

Suppose you are to form an efficient frontier with four risky securities A, B, C, and D. Which one of the securities definitely cannot be on the efficient frontier? Hint: answering this problem does not require calculation. It may help you see if you plot the expected returns against the standard deviations. Expected Standard Security Return Deviation A 9% 21% B 5% 7% C 15% 36% D 12% 15%

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter2: Risk And Return: Part I

Section: Chapter Questions

Problem 3Q: Security A has an expected return of 7%, a standard deviation of returns of 35%, a correlation...

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