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Question15 Portfolio theory as described by Markowitz is most concerned with ______ and the measure of risk in a Markowitz efficient frontier is _______. the effect of diversification on portfolio risk; standard deviation of returns. the identification of systematic risk; standard deviation of returns the identification of unsystematic risk; beta. the effect of diversification on portfolio risk; beta. the identification of unsystematic risk; standard deviation of returns. ResetMaximum marks: 3 Flag question undefined
Options
A.the effect of diversification on portfolio risk; standard deviation of returns.
B.the identification of systematic risk; standard deviation of returns
C.the identification of unsystematic risk; beta.
D.the effect of diversification on portfolio risk; beta.
E.the identification of unsystematic risk; standard deviation of returns.
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To tackle this question, I’ll evaluate what Markowitz portfolio theory emphasizes and what it uses to quantify risk.
Option 1: 'the effect of diversification on portfolio risk; standard deviation of returns.' This aligns with Markowitz’s core idea: diversification reduces portfolio risk, and risk is measured by the dispersion of returns, i.e., the standard deviation. Hence this option correctly captures bot......Login to view full explanationLog in for full answers
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