Question

You are given a two-asset portfolio with a fixed correlation coefficient. If the weights of the two assets are varied the expected portfolio return would be ____ and the expected portfolio standard deviation would be

Answer 1

Options

A. Nonlinear, elliptical

B. Nonlinear, Circular

C. Linear, elliptical

D. Linear, Circular

E. Circular, elliptical

Answer: C. Linear, elliptical

Explanation:An asset is any investment made by a person or an organisation that is capable of yielding future benefits in the future.

Portfolio is a group of Financial assets such as bonds,stocks, Financial and non Financial Securities such as real estates etc.

A two-portfollio is a portfolio owned by an organisation or a person containing two assets.

Correlation coefficient is a statistical measure that is used to establish the strength of the Relationship between two the relative movements of two variables.