Which of the following statements is FALSE? a) Aggressive investors will invest

Question

Which of the following statements is FALSE?

a) Aggressive investors will invest more in the tangent portfolio choosing a portfolio that is near the tangent portfolio or even beyond it by buying stocks on margin.

b) Only aggressive investors will choose to hold the tangent (or efficient) portfolio of risky assets.

c) An investor's preferences will determine only how much to invest in the tangent or efficient portfolio versus the risk-free investment.

d) Conservative investors will invest a small amount in the tangent or efficient portfolio, choosing a portfolio on the line near the risk-free investment

Explanation / Answer

Answer

b) Only aggressive investors will choose to hold the tangent (or efficient) portfolio of risky assets.

Note : Both type of investors will choose to hold the tangent (or efficient) portfolio of risky assets

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