Which one of the following distinguishes a minimum variance portfolio?
A) lowest risk portfolio of any possible portfolio given the same securities but in differing proportions
B) lowest risk portfolio possible given any specified expected rate of return
C) the zero risk portfolio created by maximizing the asset allocation mix
D) any portfolio with an expected standard deviation of 9 percent or less
E) any portfolio created with securities that are evenly weighted in respect to the asset allocation mix

Question

Quizplus · Accepted Answer

A minimum variance portfolio is the portfolio with the lowest risk possible given any combination of securities, regardless of the expected rate of return. It is the portfolio that optimizes the trade-off between risk and return and has the lowest standard deviation of any possible portfolio given the same securities but in differing proportions.

Which One of the Following Distinguishes a Minimum Variance Portfolio