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Consider a two asset portfolio consisting of risky stocks A and B:
Stock A: E[rA] = 15% s.d.A = 9%
Stock B: E[rB] = 10% s.d.B = 7%
| | a. | A trivial portfolio consisting solely of Stock A must be inefficient. |
| | b. | A trivial portfolio consisting solely of Stock B must be efficient. |
| | c. | A trivial portfolio consisting solely of Stock A may be efficient or inefficient depending on the correlation of the stocks' returns . |
| | d. | A trivial portfolio consisting solely of Stock A must be efficient. |
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