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CIMA

TermDefinition
The variance of a portfolio of risky securities is the _______ _____ of the securities _______ and ______ weighted sum; variances and covariances
The expected return of a portfolio of risky securities is a weighted average of the securities returns
Diversification is most effective when securities returns are negatively correlated
The efficient frontier of risky assets is the portion of the investment opportunity set that lies above the global minimum variance portfolio
Consider an investment opportunity set formed with two securities that are perfectly negatively correlated. The global minimum variance portfolio has a standard deviation that is always equal to zero
The market portfolio _____ all publicly traded financial assets includes
the market portfolio lies on the efficient frontier
all securities in the market portfolio are held in _____ to their market _____ proportion; values
The capital market line (CML) is the line from the _____ through the ______ risk-free rate; market portfolio
The CML is the best attainable _______ capital allocation line
The CML always has a positive slope
The risk measure for the CML is standard deviation
Efficient portfolios of risky securities are portfolios that have the ______ rates of return for a given level of _____ highest; risk
More risk averse investors will invest _____ in the optimal risky portfolio and _____ in the risk-free security less; more
Created by: Jennifermtfl6