Help
Course Catalog > Portfolios > 500
Portfolios 503: Modern Portfolio Theory

Test your knowledge

Choose wisely. There is only one correct answer to each question.

0%
Keep studying!
Review your answers below to learn more.
1.
The main benefit of an efficient portfolio is high returns.
Choose wisely. There is only one correct answer.
False. The main benefit of an efficient portfolio is low volatility for a given level of return.
2.
An efficient portfolio seeks the highest return for the________.
Choose wisely. There is only one correct answer.
Lowest volatility. The theory helps you to locate the best-performing set of assets for the lowest amount of volatility.
3.
The lower the volatility of an investment, the _______ its reward.
Choose wisely. There is only one correct answer.
Lower. Safe investments do not reward their owners as well as volatile ones do.
4.
If an investor is not afraid of taking risks, he or she is risk-averse.
Choose wisely. There is only one correct answer.
False. Risk-averse people are, to varying extents, wary of risk and do not invite it.
5.
The risk of a portfolio asset being affected by market changes is called systematic risk.
Choose wisely. There is only one correct answer.
True. The risk of a portfolio asset being affected by market changes is called systematic risk.