Question: Define the following terms, using graphs or equations to illustrate your answers wherever feasible: a. Portfolio; feasible set; efficient portfolio; efficient frontier b. Indifference curve;

Define the following terms, using graphs or equations to illustrate your answers wherever feasible:

a. Portfolio; feasible set; efficient portfolio; efficient frontier

b. Indifference curve; optimal portfolio

c. Capital Asset Pricing Model (CAPM); Capital Market Line (CML)

d. Characteristic line; beta coefficient, b

e. Arbitrage Pricing Theory (APT); Fama-French three-factor model; behavioral finance

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a A portfolio is made up of a group of individual assets held in combination An asset that would be relatively risky if held in isolation may have little or even no risk if held in a welldiversified p... View full answer

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