CFA Practice Question

CFA Practice Question

Which of the following is most likely correct?
A. Systematic risk is due to firm specific causes.
B. Risk averse investors will always prefer a less risky portfolio to a more risky one.
C. In the Markowitz model, investors diversify to minimize variance for a given level of expected returns.
Explanation: Risk averse investors may prefer a more risky portfolio fs the expected return is higher. Systematic risk is due to economy wide rather than firm specific causes.

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