Security enters
Security leaves
Security enters or leave
Security with high extreme value enters
Answer is Right!
Answer is Wrong!
The correct answer is: C. Security enters or leaves.
A corner portfolio is a portfolio that consists of all the assets in a market, with equal weights. It is calculated by taking the market portfolio and then removing one asset at a time. The resulting portfolio is the corner portfolio for the asset that was removed.
The corner portfolio is a useful tool for understanding the risk and return of a particular asset. It can also be used to construct a portfolio that is diversified against the risk of that asset.
Here is a brief explanation of each option:
- Option A: Security enters. This is not the correct answer because a corner portfolio is calculated by removing assets from the market portfolio, not adding them.
- Option B: Security leaves. This is not the correct answer because a corner portfolio is calculated by removing assets from the market portfolio, not adding them.
- Option C: Security enters or leaves. This is the correct answer because a corner portfolio is calculated by removing assets from the market portfolio, one at a time.
- Option D: Security with high extreme value enters. This is not the correct answer because a corner portfolio is not calculated based on the extreme values of assets.