Markowitz theory of portfolio management considers which of the following assumptions? A. Investors are…
Mean–variance portfolio theory treats investors as rational utility maximizers using return and risk information: B, D. It does not require pessimism about start-ups or a…
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Markowitz theory of portfolio management considers which of the following assumptions?
A. Investors are pessimistic about start-ups but optimistic about an established business
B. Investors have free access to fair and correct information on return and risk
C. Investors have a tendency to lean towards cryptocurrencies
D. Investors are rational and maximize their utility with a given level of income and money
Answer and explanation
Correct answer B
Mean–variance portfolio theory treats investors as rational utility maximizers using return and risk information: B, D. It does not require pessimism about start-ups or a preference for cryptocurrencies. The other codes include one of those unsupported behavioral assumptions. A and B only B and D only C and D only A and C only 1. A and B only 2. B and D only 3. C and D only 4. A and C only
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UGC NET Economics