Financial Planner

Answer: D - Statements A to C are all Markowitz portfolio theory. Markowitz is known as the father of portfolio theory constructed the efficient frontier which represents a set of portfolios that give an investor the highest return at each level of risk. There are five assumptions to this theory 1)Investors view investment alternatives as being represented by a probability distribution of expected returns over the same holding period 2) Investors maximize their one-period expected utility 3) Investors estimate risk of a portfolio on the basis of variability of expected returns 4) Investors bas all decision on expected return and risk 5 For a given level of risk, investors prefer higher returns to lower returns, or for a given return level, investors prefer less risk to more risk.