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Exam PfMP topic 1 question 232 discussion

Actual exam question from PMI's PfMP
Question #: 232
Topic #: 1
[All PfMP Questions]

An optimal portfolio based on Modern Portfolio Theory would:

  • A. offer the maximum possible expected return for a given level of risk.
  • B. generate the best possible return for a moderate level of risk.
  • C. minimize risk and use existing resource pools.
  • D. comprise a balanced mix of components based on complexity and risk.
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Suggested Answer: D 🗳️
by tpkhoa at Feb. 15, 2025, 2:25 p.m.

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tpkhoa
3 months ago
Selected Answer: A
Modern Portfolio Theory (MPT), developed by Harry Markowitz, focuses on optimizing a portfolio by balancing risk and return. The optimal portfolio in MPT: • Maximizes expected return for a given level of risk. • Diversifies investments to reduce unsystematic risk. • Finds the efficient frontier, where no other portfolio offers higher return for the same risk level.
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