An investor plans to create a portfolio of ten stocks by shorting all of them. Can he use the Markowitz theory presented in this chapter? Explain your answer.
a) Yes, Markowitz theory can be applied to a short portfolio.
b) No, Markowitz theory cannot be applied to a short portfolio.
c) Markowitz theory is only applicable to individual stocks, not portfolios.
d) The application of Markowitz theory to short portfolios is uncertain.
