Answer to Question #147898 in Finance for Maya Abdallah

Question

9. You form a portfolio by combining shares of stocks for two different companies. The companies have different expected returns, and different risks. Which statement is true for all of the possible portfolios that contain shares in both companies? (NOTE: Choices below might be incorrect because they always are false, whereas others might be incorrect because they are sometimes true and sometimes false. Only the correct choice is always true.)?
a. The return for the portfolio is less than the return of the highest return stock.
b. The risk for the portfolio lies between the risks of the component stocks.
c. The risk for the portfolio is less than the risk of the least risky stock.
d. a and b
e. a and c

Answer 1

d. a and b