Subtracting risky assets will generally move the efficient frontier _____ and to the ____. A. up,...
Subtracting risky assets will generally move the efficient frontier _____ and to the ____.
A. up, right
B. down, right
C. up, left
D. down, left
Homework Answers
Ans- Option D. Down, left
As in efficient frontier X-axis denotes Standard deviation and Y-axis denotes required Return. Since, subtracting risky assets will reduce risk and will move the efficient frontier to the left. Subtracting risking assets will also reduce expected return (as risky assets provides higher return) which will move the efficient frontier down.
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Subtracting risky assets will generally move
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