Q1. Which of the following is NOT an assumption of the Markowitz Portfolio Theory? Investors:
A) view the range of the distribution of returns as capturing risk. B) base all their decisions on expected return and risk. C) view the mean of the distribution of returns as capturing the expected return.
Q2. Which of the following statements regarding the Markowitz model of portfolio theory is FALSE? The model assumes investors:
A) estimate a portfolio's risk on the basis of the variability of expected returns. B) evaluate investment opportunities as a probability distribution of expected returns over some time period. C) view the mean of the distribution of potential outcomes as the expected risk of an investment.
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