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Markowitz portfolio theory rests primarily on which two parameters?
AMean return and skewness of returns
BExpected return and variance (or standard deviation) of returns
CVariance of returns and dividend yield (within the standard regulatory framework)
DBeta and treynor ratio of the security
Answer & Solution
Correct answer: B. Expected return and variance (or standard deviation) of returns
1. Identify what the question asks: this concept maps to meanvariance (§5.1).
2. Apply the framework or formula relevant to the topic.
3. Eliminate distractors and arrive at the correct option (B).
_Source: ICAI BoS CA Final Paper 2, Ch 6 "Portfolio Management"_
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