1. The Markowitz efficient frontier is best described as the set of portfolios that has:

a. The minimum risk for every level of return

b. Proportionally equal units of risk and return

c. The maximum excess rate of return for every given level of risk

d. The highest return for each level of beta used on the capital asset pricing model

e. Both c and d

f. None of the above

2. The concept of spot and forward rates is most closely associated with which one of the following explanations of the term structure of interest rates?

a. Expectations Hypothesis

b. Liquidity Premium Theory

c. Segmented Market Theory

d. Relative Strength Theory

e. Preferred Habitat Hypothesis

f. None of the above