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According to Markowitz portfolio theory a. a portfolio with the minimum risk for its level of...

According to Markowitz portfolio theory

a.

a portfolio with the minimum risk for its level of expected return lies on the efficient frontier
b.

combing any two risky assets in portfolio will reduce unsystematic risk compared to a portfolio holding one of two risky assets
c.

The investor who invest in both bonds and stocks should have more risk than the investor who invest in bonds only
d.

adding a risky stock to a (less risky) bond portfolio can reduce portfolio risk
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Answer #1

Markowitz portfolio theory emphasizes and quantifies the benefits of diversification, It says that by investing in more than one stock an investor can reap the benefits of diversification by reducing the riskiness of his portfolio.According to his theory,the efficient portfolio is the one with the largest expected return for a given level of risk

So, Ans is B) combining any two risky assets in portfoio will reduce unsystematic risk compared to portfoio holding one of two risky assets

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