Rational risk-averse investors will always prefer portfolios _____________

Rational risk-averse investors will always prefer portfolios _____________

Answer: located on the capital market line to those located on the efficient frontier

The complete portfolio refers to the investment in _________.

The complete portfolio refers to the investment in _________.

Answer: the risk-free asset and the risky portfolio combined

You have calculated the historical dollar-weighted return, annual geometric average return, and annual arithmetic average return. If you desire to forecast performance for next year, the best forecast will be given by the ________.

You have calculated the historical dollar-weighted return, annual geometric average return, and annual arithmetic average return. If you desire to forecast performance for next year, the best forecast will be given by the ________. 

A. dollar-weighted return
B. geometric average return
C. arithmetic average return
D. index return


Answer: C - Arithmetic

The dollar-weighted return is the

The dollar-weighted return is the

Answer: Internal Rate of Return (IRR)