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Determine whether each of the following statements is valid.

According to the two funds theorem, if two solutions of the Markowitz problem, when shorting is allowed, are known then investors seeking efficient portfolios need only invest in the risk free rate and in one master efficient fund. (valid/invalid)

The efficient frontier is a straight line when a risk free asset is available. (valid/invalid)

When a risk free asset is available, investors seeking efficient portfolios allocate capital between a single fund F of risky assets and the risk free asset. (valid/invalid)

The variance of a portfolio increases by including additional assets in the portfolio. (valid/invalid)

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92059294

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