How would you adjust a portfolio from the "perfect" MPT? A little, a lot? None?

Finance Dec 02, 2020

Expert Solution

No adjustment is required in a portfolio from the "perfect" Modern Portfolio Theory (MPT) because in perfect MPT, risk-return tread off is ideal. If we will try to move from that situation then either we will reduce our return or increase the risk. Therefore a portfolio under Modern Portfolio Theory (MPT) in perfect condition is best option.

Therefore correct choice is none

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