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All of the following correctly describes portfolio mean-variance optimization except? A. maximize portfolio mean for certain...

All of the following correctly describes portfolio mean-variance optimization except?

A. maximize portfolio mean for certain portfolio risk

B. maximize portfolio mean for certain portfolio return variance

C. minimize portfolio return risk for certain portfolio return

D. maximize portfolio return risk for certain portfolio return

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Answer #1

Portfolio mean variance optimisation focuses on maximizing the overall portfolio return by minimization of the overall risk.

So statement (D) would be false because it says that MAXIMIZE portfolio return risk for certain portfolio return but mean variance optimisation theory focuses on MINIMIZATION of portfolio risk for a particular portfolio return.

rest of the statements are true because it aims at maximizing the portfolio mean and minimising the portfolio risk.

So, the correct answer would be option (D).

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